{"id":43136,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-and-plan-of-merger-unionbancal-corp-pebble-merger.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-unionbancal-corp-pebble-merger","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-unionbancal-corp-pebble-merger.html","title":{"rendered":"Agreement and Plan of Merger – UnionBanCal Corp., Pebble Merger Sub, Inc. and Pacific Capital Bancorp"},"content":{"rendered":"

AGREEMENT AND PLAN OF MERGER <\/strong><\/p>\n

by and among<\/p>\n

UNIONBANCAL CORPORATION, <\/strong><\/p>\n

PEBBLE MERGER SUB INC. <\/strong><\/p>\n

and<\/p>\n

PACIFIC CAPITAL BANCORP <\/strong><\/p>\n

Dated as of March 9, 2012<\/p>\n

\n

TABLE OF CONTENTS <\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE I<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

THE MERGER<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 1.01<\/p>\n<\/td>\n

<\/td>\n\n

The Merger<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

1<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 1.02<\/p>\n<\/td>\n

<\/td>\n\n

Closing<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

1<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 1.03<\/p>\n<\/td>\n

<\/td>\n\n

Effective Time<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

2<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 1.04<\/p>\n<\/td>\n

<\/td>\n\n

Certificate of Incorporation<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

2<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 1.05<\/p>\n<\/td>\n

<\/td>\n\n

Bylaws<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

2<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 1.06<\/p>\n<\/td>\n

<\/td>\n\n

Directors<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

2<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 1.07<\/p>\n<\/td>\n

<\/td>\n\n

Bank Merger<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

2<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE II<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
\nCERTIFICATES<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 2.01<\/p>\n<\/td>\n

<\/td>\n\n

Effect on Capital Stock<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

3<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 2.02<\/p>\n<\/td>\n

<\/td>\n\n

Exchange of Certificate<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

3<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 2.03<\/p>\n<\/td>\n

<\/td>\n\n

Stock Options<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

5<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 2.04<\/p>\n<\/td>\n

<\/td>\n\n

Company Restricted Shares<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

6<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 2.05<\/p>\n<\/td>\n

<\/td>\n\n

Other Stock-Based Awards<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

6<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 2.06<\/p>\n<\/td>\n

<\/td>\n\n

Treasury Warrants<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

6<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE III<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 3.01<\/p>\n<\/td>\n

<\/td>\n\n

Disclosure<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

7<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 3.02<\/p>\n<\/td>\n

<\/td>\n\n

Representations and Warranties of the Company<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

8<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE IV<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB\n<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 4.01<\/p>\n<\/td>\n

<\/td>\n\n

Representations and Warranties of Purchaser and Merger Sub<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

34<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE V<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

COVENANTS RELATING TO CONDUCT OF BUSINESS<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 5.01<\/p>\n<\/td>\n

<\/td>\n\n

Conduct of Businesses Prior to the Effective Time<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

37<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 5.02<\/p>\n<\/td>\n

<\/td>\n\n

Company Forbearances<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

38<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

– i –<\/p>\n

\n

Table of Contents<\/p>\n

(Continued)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE VI<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ADDITIONAL AGREEMENTS<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 6.01<\/p>\n<\/td>\n

<\/td>\n\n

Cooperation; Regulatory Matters<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

41<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.02<\/p>\n<\/td>\n

<\/td>\n\n

Access to Information<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

42<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.03<\/p>\n<\/td>\n

<\/td>\n\n

Employee Matters<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

43<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.04<\/p>\n<\/td>\n

<\/td>\n\n

Indemnification; Directors153 and Officers153 Insurance<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

45<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.05<\/p>\n<\/td>\n

<\/td>\n\n

Exemption from Liability Under Section 16(b)<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

46<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.06<\/p>\n<\/td>\n

<\/td>\n\n

Acquisition Proposals<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

47<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.07<\/p>\n<\/td>\n

<\/td>\n\n

Takeover Laws<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

49<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.08<\/p>\n<\/td>\n

<\/td>\n\n

Financial Statements and Other Current Information<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

49<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.09<\/p>\n<\/td>\n

<\/td>\n\n

Stockholders Meeting<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

49<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.10<\/p>\n<\/td>\n

<\/td>\n\n

Proxy Filing; Information Supplied<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

50<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.11<\/p>\n<\/td>\n

<\/td>\n\n

Notification of Certain Matters<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

51<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.12<\/p>\n<\/td>\n

<\/td>\n\n

Stock Exchange Delisting<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

51<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.13<\/p>\n<\/td>\n

<\/td>\n\n

Related Party Contracts<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

51<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 6.14<\/p>\n<\/td>\n

<\/td>\n\n

Merger Sub Compliance<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

52<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE VII<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

CONDITIONS PRECEDENT<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 7.01<\/p>\n<\/td>\n

<\/td>\n\n

Conditions to Each Party153s Obligation to Effect the Merger<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

52<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 7.02<\/p>\n<\/td>\n

<\/td>\n\n

Conditions to Obligations of Purchaser and Merger Sub<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

52<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 7.03<\/p>\n<\/td>\n

<\/td>\n\n

Conditions to Obligations of the Company<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

53<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE VIII<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

TERMINATION AND AMENDMENT<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 8.01<\/p>\n<\/td>\n

<\/td>\n\n

Termination<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

54<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 8.02<\/p>\n<\/td>\n

<\/td>\n\n

Effect of Termination<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

56<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 8.03<\/p>\n<\/td>\n

<\/td>\n\n

Fees and Expenses<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

57<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 8.04<\/p>\n<\/td>\n

<\/td>\n\n

Extension; Waiver<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

58<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

ARTICLE IX<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
\n

GENERAL PROVISIONS<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 9.01<\/p>\n<\/td>\n

<\/td>\n\n

Nonsurvival of Representations, Warranties and Agreements<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

58<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.02<\/p>\n<\/td>\n

<\/td>\n\n

Modification or Amendment<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

58<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.03<\/p>\n<\/td>\n

<\/td>\n\n

Waiver of Conditions<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

58<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.04<\/p>\n<\/td>\n

<\/td>\n\n

Notices<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

58<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.05<\/p>\n<\/td>\n

<\/td>\n\n

Counterparts<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

59<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

– ii –<\/p>\n

\n

Table of Contents<\/p>\n

(Continued)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Section 9.06<\/p>\n<\/td>\n

<\/td>\n\n

Entire Agreement<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

60<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.07<\/p>\n<\/td>\n

<\/td>\n\n

Severability<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

60<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.08<\/p>\n<\/td>\n

<\/td>\n\n

Governing Law; Jurisdiction<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

60<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.09<\/p>\n<\/td>\n

<\/td>\n\n

Waiver of Jury Trial<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

60<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.10<\/p>\n<\/td>\n

<\/td>\n\n

Publicity<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

61<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.11<\/p>\n<\/td>\n

<\/td>\n\n

Assignment; Third-Party Beneficiaries<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

61<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.12<\/p>\n<\/td>\n

<\/td>\n\n

Specific Performance<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

61<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.13<\/p>\n<\/td>\n

<\/td>\n\n

Definitions<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

61<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Section 9.14<\/p>\n<\/td>\n

<\/td>\n\n

Other Definitional Provisions<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

65<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

– iii –<\/p>\n

\n

INDEX OF DEFINED TERMS <\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Acquisition Proposal<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Advisory Client<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(ee)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Advisory Contract<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(ee)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Advisory Entity<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(ee)<\/p>\n<\/td>\n<\/tr>\n

\n

Affiliate<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Agency<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(v)(v)<\/p>\n<\/td>\n<\/tr>\n

\n

Agreement<\/p>\n<\/td>\n

<\/td>\n\n

Preamble<\/p>\n<\/td>\n<\/tr>\n

\n

Alternative Acquisition Agreement<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.06(c)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Anti-Money Laundering Laws<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(o)(iii)<\/p>\n<\/td>\n<\/tr>\n

\n

Audited 2011 Financials<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.08(b)<\/p>\n<\/td>\n<\/tr>\n

\n

Bank<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(a)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Bank Merger<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.07<\/p>\n<\/td>\n<\/tr>\n

\n

Bankruptcy and Equity Exception<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(d)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Benefit Plan<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(r)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

BHCA<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(a)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Burdensome Condition<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.01(c)<\/p>\n<\/td>\n<\/tr>\n

\n

business day<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.02<\/p>\n<\/td>\n<\/tr>\n

\n

Bylaws<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.05<\/p>\n<\/td>\n<\/tr>\n

\n

CERCLA<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(u)<\/p>\n<\/td>\n<\/tr>\n

\n

Certificate<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.01(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Change of Recommendation<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.06(d)<\/p>\n<\/td>\n<\/tr>\n

\n

Charter<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.04<\/p>\n<\/td>\n<\/tr>\n

\n

Closing<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.02<\/p>\n<\/td>\n<\/tr>\n

\n

Closing Date<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.02<\/p>\n<\/td>\n<\/tr>\n

\n

Code<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.02(g)<\/p>\n<\/td>\n<\/tr>\n

\n

Common Stock<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.01(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Company<\/p>\n<\/td>\n

<\/td>\n\n

Preamble<\/p>\n<\/td>\n<\/tr>\n

\n

Company Board<\/p>\n<\/td>\n

<\/td>\n\n

Recitals<\/p>\n<\/td>\n<\/tr>\n

\n

Company Board Recommendation<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(d)(iii)<\/p>\n<\/td>\n<\/tr>\n

\n

Company Disclosure Schedule<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.01<\/p>\n<\/td>\n<\/tr>\n

\n

Company Insurance Policies<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(x)<\/p>\n<\/td>\n<\/tr>\n

\n

Company Option<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.03(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Company Proprietary Rights<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(y)<\/p>\n<\/td>\n<\/tr>\n

\n

Company Restricted Share<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.04<\/p>\n<\/td>\n<\/tr>\n

\n

Company Reports<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(h)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Company Stock Award<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.05<\/p>\n<\/td>\n<\/tr>\n

\n

Company Stock Plans<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.03(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Company 10-K<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(f)<\/p>\n<\/td>\n<\/tr>\n

\n

Company 401(k) Plan<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.03(d)<\/p>\n<\/td>\n<\/tr>\n

\n

Confidentiality Agreement<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.02(b)<\/p>\n<\/td>\n<\/tr>\n

\n

Confidentiality Policies<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(y)<\/p>\n<\/td>\n<\/tr>\n

\n

Contract<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Covered Employees<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.03(a)<\/p>\n<\/td>\n<\/tr>\n

\n

D&O Insurance<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.04(b)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

– iv –<\/p>\n

\n

Index Of Defined Terms<\/p>\n

(Continued)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Delaware Certificate of Merger<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.03<\/p>\n<\/td>\n<\/tr>\n

\n

DGCL<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.01<\/p>\n<\/td>\n<\/tr>\n

\n

DIF<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(a)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Disclosure Schedules<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.01<\/p>\n<\/td>\n<\/tr>\n

\n

Dissenting Shares<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.01(a)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Dissenting Stockholders<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.01(a)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Effective Time<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.03<\/p>\n<\/td>\n<\/tr>\n

\n

Employees<\/p>\n<\/td>\n

<\/td>\n\n

Section 5.02(h)<\/p>\n<\/td>\n<\/tr>\n

\n

Encumbrance<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Environmental Laws<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(u)<\/p>\n<\/td>\n<\/tr>\n

\n

ERISA<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(r)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

ERISA Affiliate<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(r)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Exchange Act<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.01<\/p>\n<\/td>\n<\/tr>\n

\n

Exchange Fund<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.02(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Excluded Share<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

FDIC<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(a)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Federal Reserve<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(e)(iii)<\/p>\n<\/td>\n<\/tr>\n

\n

Financial Statements<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(g)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Form ADV<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(ee)(iv)<\/p>\n<\/td>\n<\/tr>\n

\n

GAAP<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Governmental Entity<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Hazardous Substances<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(u)<\/p>\n<\/td>\n<\/tr>\n

\n

Indemnified Parties<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.04(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Information Statement<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.10(a)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Interim Financials<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(g)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Investment Advisers Act<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(ee)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

IRS<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(r)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

IT Assets<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(y)<\/p>\n<\/td>\n<\/tr>\n

\n

JFSA<\/p>\n<\/td>\n

<\/td>\n\n

Section 4.01(b)(iii)<\/p>\n<\/td>\n<\/tr>\n

\n

JFSA Approval<\/p>\n<\/td>\n

<\/td>\n\n

Section 4.01(b)(iii)<\/p>\n<\/td>\n<\/tr>\n

\n

Knowledge<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Laws<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Leased Real Property<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(i)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Loans<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(v)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Material Adverse Effect<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Material Contract<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(m)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Merger<\/p>\n<\/td>\n

<\/td>\n\n

Recitals<\/p>\n<\/td>\n<\/tr>\n

\n

Merger Sub<\/p>\n<\/td>\n

<\/td>\n\n

Preamble<\/p>\n<\/td>\n<\/tr>\n

\n

Mortgage Vendors<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(w)(iv)<\/p>\n<\/td>\n<\/tr>\n

\n

NASDAQ<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(h)(iv)<\/p>\n<\/td>\n<\/tr>\n

\n

Non-Disclosure Agreement<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.02(b)<\/p>\n<\/td>\n<\/tr>\n

\n

OCC<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(e)(iii)<\/p>\n<\/td>\n<\/tr>\n

\n

OFAC<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(o)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Order<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Outside Date<\/p>\n<\/td>\n

<\/td>\n\n

Section 8.01(c)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

– v –<\/p>\n

\n

Index Of Defined Terms<\/p>\n

(Continued)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Owned Real Property<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(i)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Party<\/p>\n<\/td>\n

<\/td>\n\n

Recitals<\/p>\n<\/td>\n<\/tr>\n

\n

Paying Agent<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.02(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Per Share Merger Consideration<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.01(a)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Person<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Pool<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(v)(viii)<\/p>\n<\/td>\n<\/tr>\n

\n

Preferred Stock<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(b)<\/p>\n<\/td>\n<\/tr>\n

\n

Previously Disclosed<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.01<\/p>\n<\/td>\n<\/tr>\n

\n

Proprietary Rights<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(y)(iv)<\/p>\n<\/td>\n<\/tr>\n

\n

Proxy Statement<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.10(a)(ii)<\/p>\n<\/td>\n<\/tr>\n

\n

Purchaser<\/p>\n<\/td>\n

<\/td>\n\n

Preamble<\/p>\n<\/td>\n<\/tr>\n

\n

Purchaser Bank<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.07<\/p>\n<\/td>\n<\/tr>\n

\n

Purchaser Disclosure Schedule<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.01<\/p>\n<\/td>\n<\/tr>\n

\n

Purchaser Material Adverse Effect<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Purchaser Plans<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.03(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Regulatory Agreement<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(t)<\/p>\n<\/td>\n<\/tr>\n

\n

Regulatory Consents<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(e)(v)<\/p>\n<\/td>\n<\/tr>\n

\n

Related Party Contract<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(cc)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Representatives<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.06(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Required Filings<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.01(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Requisite Regulatory Consents<\/p>\n<\/td>\n

<\/td>\n\n

Section 7.01(c)<\/p>\n<\/td>\n<\/tr>\n

\n

Requisite Stockholder Approval<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(d)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

Sarbanes-Oxley Act<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(h)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

SEC<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.01<\/p>\n<\/td>\n<\/tr>\n

\n

Securities Act<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.01<\/p>\n<\/td>\n<\/tr>\n

\n

Share<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.01(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Special Severance Period<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.03(b)<\/p>\n<\/td>\n<\/tr>\n

\n

Special Severance Policy<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.03(b)<\/p>\n<\/td>\n<\/tr>\n

\n

SRO<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Stockholders Meeting<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.09<\/p>\n<\/td>\n<\/tr>\n

\n

Subsidiary<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Superior Proposal<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Surviving Corporation<\/p>\n<\/td>\n

<\/td>\n\n

Section 1.01<\/p>\n<\/td>\n<\/tr>\n

\n

Takeover Laws<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(z)<\/p>\n<\/td>\n<\/tr>\n

\n

Tax Return<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Taxes<\/p>\n<\/td>\n

<\/td>\n\n

Section 9.13<\/p>\n<\/td>\n<\/tr>\n

\n

Termination Fee<\/p>\n<\/td>\n

<\/td>\n\n

Section 8.02(c)(iii)<\/p>\n<\/td>\n<\/tr>\n

\n

Trade Secrets<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(y)(iii)<\/p>\n<\/td>\n<\/tr>\n

\n

Treasury Department<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.06(b)<\/p>\n<\/td>\n<\/tr>\n

\n

Treasury Warrants<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(b)<\/p>\n<\/td>\n<\/tr>\n

\n

Treasury Warrant Consideration<\/p>\n<\/td>\n

<\/td>\n\n

Section 2.06(a)<\/p>\n<\/td>\n<\/tr>\n

\n

Unaudited 2011 Financials<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(g)(i)<\/p>\n<\/td>\n<\/tr>\n

\n

VA<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(v)(v)<\/p>\n<\/td>\n<\/tr>\n

\n

Voting Debt<\/p>\n<\/td>\n

<\/td>\n\n

Section 3.02(b)<\/p>\n<\/td>\n<\/tr>\n

\n

Written Consent<\/p>\n<\/td>\n

<\/td>\n\n

Section 6.09<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

– vi –<\/p>\n

\n

AGREEMENT AND PLAN OF MERGER<\/strong>, dated as of March 9, 2012
\n(this “Agreement<\/u>“), by and among UnionBanCal Corporation, a Delaware
\ncorporation (“Purchaser<\/u>“), Pebble Merger Sub Inc., a corporation
\norganized under the laws of the State of Delaware and a wholly owned subsidiary
\nof Purchaser (“Merger Sub<\/u>“) and Pacific Capital Bancorp, a Delaware
\ncorporation (the “Company<\/u>“).<\/p>\n

RECITALS <\/strong><\/p>\n

WHEREAS, the Board of Directors of the Company (the “Company Board<\/u>“)
\nhas unanimously (i) approved and declared advisable this Agreement and the
\ntransactions contemplated by this Agreement, including the strategic business
\ncombination transaction provided for in this Agreement in which the Merger Sub
\nwill, on the terms and subject to the conditions set forth herein, merge with
\nand into the Company (the “Merger<\/u>“), with the Company being the surviving
\nentity in the Merger, (ii) determined that this Agreement and such transactions
\nare fair to, and in the best interests of, the Company and its stockholders and
\n(iii) resolved to recommend that the Company153s stockholders adopt this
\nAgreement.<\/p>\n

WHEREAS, each of the boards of directors of Purchaser and Merger Sub has
\nunanimously (i) approved and declared advisable this Agreement and the
\ntransactions contemplated by this Agreement, including the Merger, upon the
\nterms and subject to the conditions set forth herein, (ii) determined that this
\nAgreement and such transactions are fair to, and in the best interests of,
\nPurchaser and Merger Sub, respectively, and the stockholders of Purchaser and
\nMerger Sub, respectively and (iii) in the case of the board of directors of
\nMerger Sub, resolved to recommend that Merger Sub153s stockholder adopt this
\nAgreement.<\/p>\n

WHEREAS, the parties hereto (each, a “Party<\/u>“) desire to make certain
\nrepresentations, warranties and agreements in connection with the Merger and
\nalso to prescribe certain conditions to the Merger.<\/p>\n

NOW, THEREFORE, in consideration of the mutual covenants, representations,
\nwarranties and agreements contained in this Agreement, the Parties agree as
\nfollows:<\/p>\n

ARTICLE I <\/strong><\/p>\n

THE MERGER <\/strong><\/p>\n

Section 1.01<\/u> The Merger<\/u>. Upon the terms and subject to the
\nconditions set forth in this Agreement, at the Effective Time (as defined in
\nSection 1.03), Merger Sub shall be merged with and into the Company and the
\nseparate corporate existence of Merger Sub shall thereupon cease. The Company
\nshall be the surviving corporation in the Merger (sometimes hereinafter referred
\nto as the “Surviving Corporation<\/u>“), and the separate corporate existence
\nof the Company, with all its rights, privileges, immunities, powers and
\nfranchises, shall continue unaffected by the Merger. The Merger shall have the
\neffects specified in the Delaware General Corporation Law (the “DGCL<\/u>“).\n<\/p>\n

Section 1.02<\/u> Closing<\/u>. Unless otherwise mutually agreed in
\nwriting between the Company and Purchaser, the closing for the Merger (the
\n“Closing<\/u>“) shall take place at the offices of Sullivan & Cromwell
\nLLP, 125 Broad Street, New York, New York, on the first business day<\/p>\n

\n

of the first calendar month (the “Closing Date<\/u>“) that follows the
\nmonth in which the last to be satisfied or waived of the conditions set forth in
\nArticle VII (other than those conditions that by their nature are to be
\nsatisfied at the Closing, but subject to the fulfillment or waiver of those
\nconditions) shall be satisfied or waived in accordance with this Agreement. For
\npurposes of this Agreement, the term “business day<\/u>” shall mean any day
\nending at 11:59 p.m. (Pacific Time) other than a Saturday or Sunday or a day on
\nwhich banks are required or authorized to close in the City of San Francisco.\n<\/p>\n

Section 1.03<\/u> Effective Time<\/u>. As soon as practicable following
\nthe Closing, the Company and Purchaser shall cause a Certificate of Merger (the
\n“Delaware Certificate of Merger<\/u>“) to be executed, acknowledged and filed
\nwith the Secretary of State of the State of Delaware as provided in Section 251
\nof the DGCL. The Merger shall become effective at the time (i) when the Delaware
\nCertificate of Merger has been duly filed with the Secretary of State of the
\nState of Delaware or (ii) at such later time as may be agreed by the Parties in
\nwriting and specified in the Delaware Certificate of Merger (in each case, the
\n“Effective Time<\/u>“).<\/p>\n

Section 1.04<\/u> Certificate of Incorporation<\/u>. The certificate of
\nincorporation of the Company shall be amended at the Effective Time to read in
\nits entirety as set forth in Exhibit A<\/u> and, as so amended, shall be the
\ncertificate of incorporation of the Surviving Corporation (the
\n“Charter<\/u>“), until thereafter duly amended as provided therein or by
\napplicable Laws.<\/p>\n

Section 1.05<\/u> Bylaws<\/u>. The Parties shall take all actions
\nnecessary so that the bylaws of Merger Sub in effect immediately prior to the
\nEffective Time shall be the bylaws of the Surviving Corporation (the
\n“Bylaws<\/u>“), until thereafter amended as provided therein or by applicable
\nLaw.<\/p>\n

Section 1.06<\/u> Directors<\/u>. The Parties hereto shall take all
\nactions necessary so that the directors of Merger Sub at the Effective Time
\nshall, from and after the Effective Time, be the directors of the Surviving
\nCorporation until their successors have been duly elected or appointed and
\nqualified or until their earlier death, resignation or removal in accordance
\nwith the Charter and the Bylaws.<\/p>\n

Section 1.07<\/u> Bank Merger<\/u>. As soon as practicable after the
\nexecution and delivery of this Agreement, Bank and Union Bank, N.A., a wholly
\nowned subsidiary of Purchaser and a national banking association, duly
\norganized, validly existing and in good standing under the National Bank Act, 12
\nU.S.C. \u00a7 1 et seq.<\/em> (“Purchaser Bank<\/u>“), will enter into a
\nmutually agreed form of agreement, pursuant to which Bank will merge or
\nconsolidate with and into Purchaser Bank following the Effective Time (the
\n“Bank Merger<\/u>“) in accordance with the provisions of 12 U.S.C. \u00a7215a and
\n12 U.S.C. \u00a71828(c). The Parties intend that the Bank Merger will become
\neffective immediately following the Effective Time.<\/p>\n

– 2 –<\/p>\n

\n

ARTICLE II <\/strong><\/p>\n

EFFECT OF THE MERGER ON CAPITAL STOCK; <\/strong><\/p>\n

EXCHANGE OF CERTIFICATES <\/strong><\/p>\n

Section 2.01<\/u> Effect on Capital Stock<\/u>. At the Effective Time, as
\na result of the Merger and without any action on the part of the holder of any
\ncapital stock of the Company:<\/p>\n

(a) Merger Consideration<\/u>. Each share of the Common Stock, par value
\n$0.001 per share (the “Common Stock<\/u>“), of the Company (a “Share<\/u>”
\nor, collectively, the “Shares<\/u>“) issued and outstanding immediately prior
\nto the Effective Time (other than (i) the Excluded Shares and (ii) Shares that
\nare owned by stockholders (“Dissenting Stockholders<\/u>“) who have perfected
\nand not effectively withdrawn a demand for appraisal rights pursuant to Section
\n262 of the DGCL (“Dissenting Shares<\/u>“)) shall be converted into the right
\nto receive $46.00 per Share (the “Per Share Merger Consideration<\/u>“),
\nwithout interest. At the Effective Time, all the Shares shall cease to be
\noutstanding, shall be cancelled and shall cease to exist, and each certificate
\n(a “Certificate<\/u>“) formerly representing any of the Shares (other than
\nExcluded Shares and Dissenting Shares) shall thereafter represent only the right
\nto receive the Per Share Merger Consideration, without interest.<\/p>\n

(b) Cancellation of Excluded Shares<\/u>. Each Excluded Share shall, by
\nvirtue of the Merger and without any action on the part of the holder thereof,
\ncease to be outstanding, be cancelled without payment of any consideration
\ntherefor and shall cease to exist, subject only to any rights the holder thereof
\nmay have under Section 2.02(f).<\/p>\n

(c) Dissenting Shares<\/u>. Notwithstanding anything to the contrary
\ncontained herein, the holders of any Dissenting Share shall be entitled only to
\nsuch rights and payments as are granted by Section 262 of the DGCL;
\nprovided<\/em>, however<\/em>, that if any such holder shall effectively
\nwaive, withdraw or lose such holder153s rights under Section 262 of the DGCL, each
\nof such holder153s Dissenting Shares shall thereupon be deemed to have been
\nconverted at the Effective Time into the right to receive the Per Share Merger
\nConsideration, without interest and after giving effect to any required Tax
\nwithholdings as provided in Section 2.02(g), and such holder thereof shall cease
\nto have any other rights with respect thereto.<\/p>\n

(d) Merger Sub<\/u>. At the Effective Time, each share of Common Stock, par
\nvalue $0.001 per share, of Merger Sub issued and outstanding immediately prior
\nto the Effective Time shall be converted into one share of common stock, par
\nvalue $0.001 per share, of the Surviving Corporation.<\/p>\n

Section 2.02<\/u> Exchange of Certificate<\/u>.<\/p>\n

(a) Paying Agent<\/u>. At the Effective Time, Purchaser shall make
\navailable or cause to be made available to a paying agent selected by Purchaser
\nwith the Company153s prior approval (such approval not to be unreasonably
\nconditioned, withheld or delayed) (the “Paying Agent<\/u>“), for the benefit
\nof the holders of Shares, a cash amount in immediately available funds necessary
\nfor the Paying Agent to make payments under Section 2.01(a) (such cash being
\nhereinafter referred to as the “Exchange Fund<\/u>“).<\/p>\n

– 3 –<\/p>\n

\n

(b) Exchange Procedures<\/u>. Promptly after the Effective Time, the
\nSurviving Corporation shall cause the Paying Agent to mail to each holder of
\nrecord of Shares (other than holders of Excluded Shares) (i) a letter of
\ntransmittal in customary form specifying that delivery shall be effected, and
\nrisk of loss and title to the Certificates shall pass, only upon delivery of the
\nCertificates (or affidavits of loss in lieu of the Certificates as provided in
\nSection 2.02(e)) to the Paying Agent, such letter of transmittal to be in such
\nform and have such other provisions as Purchaser and the Company may reasonably
\nagree, and (ii) instructions for use in effecting the surrender of the
\nCertificates (or affidavits of loss in lieu of the Certificates as provided in
\nSection 2.02(e)) in exchange for the Per Share Merger Consideration. Upon
\nsurrender of a Certificate (or affidavit of loss in lieu of the Certificate as
\nprovided in Section 2.02(e)) to the Paying Agent in accordance with the terms of
\nsuch letter of transmittal, duly executed, the holder of such Certificate shall
\nbe entitled to receive in exchange therefor a cash amount in immediately
\navailable funds (after giving effect to any required Tax withholdings as
\nprovided in Section 2.02(g)) equal to (x) the number of Shares represented by
\nsuch Certificate (or affidavit of loss in lieu of the Certificate as provided in
\nSection 2.02(e)) multiplied by (y) the Per Share Merger Consideration, and the
\nCertificate so surrendered shall forthwith be cancelled. No interest will be
\npaid or accrued on any amount payable upon due surrender of the Certificates. In
\nthe event of a transfer of ownership of Shares that is not registered in the
\ntransfer records of the Company, a check for any cash to be exchanged upon due
\nsurrender of the Certificate may be issued to such transferee if the Certificate
\npreviously representing such Shares is presented to the Paying Agent,
\naccompanied by all documents required to evidence and effect such transfer and
\nto evidence that any applicable stock transfer taxes have been paid or are not
\napplicable. Notwithstanding the foregoing, (1) in the case of the Treasury
\nDepartment and (2) in the event that the Requisite Stockholder Approval in the
\nform of the Written Consent is delivered to the Company in accordance with
\nSection 6.09, any stockholder of the Company who shall have executed and
\ndelivered such Written Consent, Purchaser shall, or shall cause the Paying Agent
\nto, from and after the Effective Time, deliver the foregoing payments required
\nunder this Section 2.02(b) to the Treasury Department and\/or any such
\nstockholder, as applicable, immediately upon surrender by the Treasury
\nDepartment and\/or any such stockholder, respectively, of its Certificates,
\nwithout any requirement in respect of such letter of transmittal.<\/p>\n

(c) No Transfers<\/u>. From and after the Effective Time, there shall be no
\ntransfers on the stock transfer books of the Company of the Shares that were
\noutstanding immediately prior to the Effective Time. If, after the Effective
\nTime, any Certificate is presented to the Surviving Corporation, Purchaser or
\nthe Paying Agent for transfer, it shall be cancelled and exchanged for the cash
\namount in immediately available funds to which the holder of the Certificate is
\nentitled pursuant to this Article II.<\/p>\n

(d) Termination of Exchange Fund<\/u>. Any portion of the Exchange Fund
\n(including the proceeds of any investments thereof) that remains unclaimed by
\nthe stockholders of the Company for one hundred eighty (180) days after the
\nEffective Time shall be delivered to the Surviving Corporation. Any holder of
\nShares (other than Excluded Shares) who has not theretofore complied with this
\nArticle II shall thereafter look only to the Surviving Corporation for payment
\nof the Per Share Merger Consideration (after giving effect to any required Tax
\nwithholdings as provided in Section 2.02(g)) upon due surrender of its
\nCertificates (or affidavits of loss in lieu of the Certificates), without any
\ninterest thereon. Notwithstanding the foregoing, none of the Surviving
\nCorporation, Purchaser, the Paying Agent or any other Person shall be liable to
\nany former holder of Shares for any amount properly delivered to a public
\nofficial pursuant to applicable abandoned property, escheat or similar Laws.\n<\/p>\n

– 4 –<\/p>\n

\n

(e) Lost, Stolen or Destroyed Certificates<\/u>. In the event any
\nCertificate shall have been lost, stolen or destroyed, upon the making of an
\naffidavit of that fact by the Person claiming such Certificate to be lost,
\nstolen or destroyed and, if required by Purchaser, the posting by such Person of
\na bond in customary amount and upon such terms as may be required by Purchaser
\nas indemnity against any claim that may be made against it or the Surviving
\nCorporation with respect to such Certificate, the Paying Agent will issue a
\ncheck in the amount (after giving effect to any required Tax withholdings) equal
\nto the number of Shares represented by such lost, stolen or destroyed
\nCertificate multiplied by the Per Share Merger Consideration.<\/p>\n

(f) Appraisal Rights<\/u>. No Person who has perfected a demand for
\nappraisal rights pursuant to Section 262 of the DGCL shall be entitled to
\nreceive the Per Share Merger Consideration with respect to the Shares owned by
\nsuch Person unless and until such Person shall have effectively withdrawn or
\nlost such Person153s right to appraisal under the DGCL. Each Dissenting
\nStockholder shall be entitled to receive only the payment provided by Section
\n262 of the DGCL with respect to Shares owned by such Dissenting Stockholder. The
\nCompany shall give Purchaser (i) reasonably prompt notice of any written demands
\nfor appraisal, attempted withdrawals of such demands, and any other instruments
\nserved pursuant to applicable Law that are received by the Company relating to
\nstockholders153 rights of appraisal and (ii) the opportunity to direct all
\nnegotiations and proceedings with respect to demand for appraisal under Section
\n262 of the DGCL. The Company shall not, except with the prior written consent of
\nPurchaser, voluntarily make any payment with respect to any demands for
\nappraisal, offer to settle or settle any such demands or approve any withdrawal
\nof any such demands.<\/p>\n

(g) Withholding Rights<\/u>. Each of Purchaser and the Surviving
\nCorporation shall be entitled to deduct and withhold from the consideration
\notherwise payable pursuant to this Agreement to any holder of Shares such
\namounts as it is required to deduct and withhold with respect to the making of
\nsuch payment under the Internal Revenue Code of 1986 (the “Code<\/u>“) or any
\nother applicable state, local or foreign Tax Laws. To the extent that amounts
\nare so withheld by the Surviving Corporation or Purchaser, as the case may be,
\nsuch withheld amounts (i) shall be remitted by Purchaser or the Surviving
\nCorporation, as applicable, to the applicable Governmental Entity, and (ii) to
\nthe extent so remitted, shall be treated for all purposes of this Agreement as
\nhaving been paid to the holder of Shares in respect of which such deduction and
\nwithholding was made by the Surviving Corporation or Purchaser, as the case may
\nbe.<\/p>\n

Section 2.03<\/u> Stock Options<\/u>.<\/p>\n

(a) At the Effective Time, each outstanding option to purchase shares of
\nCommon Stock under the Company Stock Plans (each, a “Company Option<\/u>“),
\nwhether vested or unvested immediately prior to the Effective Time, shall,
\nautomatically and without any required action on the part of the holder thereof,
\nbe cancelled and converted into only the right to receive an amount in cash
\n(subject, in each case, to any withholding as provided in Section 2.02(g) and to
\nPurchaser153s receipt of an option surrender agreement in the form set forth on
\nSection 2.05 of the Company Disclosure Schedule) equal to the product of (A) the
\npositive difference, if any, of the Per Share Merger Consideration minus<\/u>
\nthe exercise price per share of such Company Option<\/p>\n

– 5 –<\/p>\n

\n

multiplied<\/u> by (B) the number of shares of Common Stock issuable upon
\nthe exercise of such Company Option as of immediately prior to the Effective
\nTime, which amount shall be payable as soon as reasonably practicable following
\nthe Effective Time and in no event later than five (5) business days after the
\nEffective Time. To the extent the exercise price of a Company Option is greater
\nthan or equal to the Per Share Merger Consideration, such Company Option shall
\nbe cancelled for no consideration. As used in this Agreement, the term
\n“Company Stock Plans<\/u>” means the plans set forth in Section 2.03(a) of the
\nCompany Disclosure Schedule.<\/p>\n

Section 2.04<\/u> Company Restricted Shares<\/u>. Each share of Common
\nStock subject to vesting, repurchase or other lapse restrictions pursuant to any
\nof the Company Stock Plans (each, a “Company Restricted Share<\/u>“) that is
\noutstanding immediately prior to the Effective Time shall vest in full and
\nbecome free of such restrictions and any repurchase right shall lapse, as of the
\nEffective Time and, at the Effective Time, the holder thereof shall be entitled
\nto receive the Per Share Merger Consideration (subject to any withholdings as
\nprovided in Section 2.02(g)) with respect to each such Company Restricted Share
\nin accordance with Section 2.01(a).<\/p>\n

Section 2.05<\/u> Other Stock-Based Awards<\/u>. At the Effective Time,
\neach right of any kind, contingent or accrued, to receive shares of Common Stock
\nor benefits measured by the value of a number of shares of Common Stock, and
\neach award of any kind consisting of shares of Common Stock, including a
\ndeferred share of Common Stock, granted under any of the Company Stock Plans
\nthat is outstanding immediately prior to the Effective Time (other than the
\nTreasury Warrant, Company Options and the Company Restricted Shares) (each, a
\n“Company Stock Award<\/u>“) shall vest in full and be cancelled and converted
\ninto only the right to receive an amount in cash (subject, in each case, to any
\nwithholding as provided in Section 2.02(g) and to Purchaser153s receipt of a
\nstock-based award surrender agreement in the form set forth on Section 2.05 of
\nthe Company Disclosure Schedule) equal to the product of (A) the Per Share
\nMerger Consideration multiplied<\/u> by (B) the number of shares of Common
\nStock subject to such Company Stock Award as of immediately prior to the
\nEffective Time, which amount shall be payable as soon as reasonably practicable
\nfollowing the Effective Time and in no event later than five (5) business days
\nafter the Effective Time; provided<\/em> that, if a Company Stock Award
\nconstitutes “non-qualified deferred compensation” within the meaning of Section
\n409A of the Code, the cash payment in respect of such Company Stock Award as
\ndetermined hereunder shall be paid at such time or times as is provided under
\nthe applicable plan or award agreement governing such Company Stock Award.<\/p>\n

Section 2.06<\/u> Treasury Warrants<\/u>.<\/p>\n

(a) At the Effective Time, by virtue of the Merger and without any action on
\nthe part of the holder thereof, each outstanding Treasury Warrant (as defined in
\nSection 3.02(b)), shall cease to represent a warrant to purchase Common Stock
\nand shall be converted automatically into a right to exercise such Treasury
\nWarrant in accordance with the terms of such Treasury Warrant to receive an
\namount in cash (subject to any withholding as provided in Section 2.02(g)) equal
\nto (A) the Per Share Merger Consideration multiplied<\/u> by (B) the number of
\nshares of Common Stock issuable upon the exercise of such Treasury Warrant
\nimmediately prior to the Effective Time (the “Treasury Warrant
\nConsideration<\/u>“), which amount shall be payable following the Effective Time
\nin accordance with Section 2.06(b).<\/p>\n

– 6 –<\/p>\n

\n

(b) The foregoing payment set forth in clause (a) may be made by Purchaser or
\nany of its Affiliates, or at Purchaser153s election, the Paying Agent. From and
\nafter the Effective Time, Purchaser shall, or shall cause the Paying Agent to,
\ndeliver the Treasury Warrant Consideration to the U.S. Department of the
\nTreasury (“Treasury Department<\/u>“) or any other holder of Treasury Warrants
\n(solely with respect to shares of Common Stock covered by such Treasury
\nWarrants) immediately upon surrender by such holder of its Treasury Warrants and
\npayment of the then-applicable exercise price in respect thereof in accordance
\nwith the terms of such Treasury Warrants (it being agreed that to the extent
\npracticable, the Treasury Warrant shall be net settled). In the event any
\nTreasury Warrants shall have been lost, stolen or destroyed, a holder of such
\nTreasury Warrants shall have to make and deliver to Purchaser or the Surviving
\nCorporation an affidavit of that fact by such holder and an agreement in form
\nreasonably satisfactory to Purchaser indemnifying Purchaser and the Surviving
\nCorporation against any claim that may be made against Purchaser or the
\nSurviving Corporation with respect to such Treasury Warrants.<\/p>\n

ARTICLE III <\/strong><\/p>\n

REPRESENTATIONS AND WARRANTIES OF THE COMPANY
\n<\/strong><\/p>\n

Section 3.01<\/u> Disclosure<\/u>. On or prior to the date of this
\nAgreement the Company has delivered to Purchaser and Merger Sub a schedule (the
\n“Company Disclosure Schedule<\/u>“) and Purchaser and Merger Sub have
\ndelivered to the Company a schedule (the “Purchaser Disclosure
\nSchedule<\/u>,” together with the Company Disclosure Schedule, the
\n“Disclosure Schedules<\/u>“) setting forth, among other things, items the
\ndisclosure of which is necessary or appropriate either in response to an express
\ndisclosure requirement contained in a provision hereof or as an exception to one
\nor more representations or warranties contained in Article III and Article IV,
\nor to one or more of the Company153s or Purchaser153s covenants contained herein.
\n“Previously Disclosed<\/u>” with regard to a Party means only that information
\nset forth on such Party153s Disclosure Schedule; provided<\/em>,
\nhowever<\/em>, that (i) disclosure in any section of such Disclosure Schedule
\nshall apply to the indicated sections of this Agreement, except that it shall
\nalso apply to the other section(s) of this Agreement and such Disclosure
\nSchedule when it is reasonably apparent that such disclosure is relevant to such
\nsection(s) of this Agreement or such Disclosure Schedule but only to the extent
\nrelevant and (ii) with regard to the Company, “Previously Disclosed” shall also
\ninclude information publicly disclosed by the Company in any forms, statements,
\ncertifications, reports and documents filed with the Securities and Exchange
\nCommission (the “SEC<\/u>“) pursuant to the Securities Act of 1933 (the
\n“Securities Act<\/u>“) or the Securities Exchange Act of 1934 (the
\n“Exchange Act<\/u>“) since December 31, 2010 and publicly available prior to
\nthe date of this Agreement (excluding any disclosures contained solely in such
\ndocuments under the heading “Risk Factors” and any disclosure of risks included
\nin any “forward-looking statements” disclaimer or other statements that are
\nsimilarly non-specific and cautionary and are predictive or forward-looking in
\nnature).<\/p>\n

– 7 –<\/p>\n

\n

Section 3.02<\/u> Representations and Warranties of the Company<\/u>. The
\nCompany represents and warrants to Purchaser and Merger Sub that, except as
\nPreviously Disclosed:<\/p>\n

(a) Organization, Good Standing and Qualification<\/u>.<\/p>\n

(i) The Company is a corporation duly organized, validly existing and in good
\nstanding under the laws of the State of Delaware. The Company is a bank holding
\ncompany duly registered under the Bank Holding Company Act of 1956 (the
\n“BHCA<\/u>“) and meets the applicable requirements for qualification as such.
\nThe Company has all corporate power and authority to own or lease all the assets
\nowned or leased by it and to conduct its business in all material respects as it
\nis now being conducted. The Company is duly licensed or qualified to do business
\nand in good standing as a foreign corporation in all jurisdictions (A) in which
\nthe nature of the activities conducted by the Company requires such license or
\nqualification and (B) in which the Company owns or leases real property, other
\nthan such failures that would not have any material impact on the Company. The
\ncertificate of incorporation of the Company complies in all material respects
\nwith applicable Law. A true, complete and correct copy of each of the
\ncertificate of incorporation and the bylaws of the Company, as amended and as
\ncurrently in effect, has been delivered or made available to Purchaser.<\/p>\n

(ii) Santa Barbara Bank & Trust, N.A. (“Bank<\/u>“) is a wholly owned
\nsubsidiary of the Company and is a national banking association duly organized,
\nvalidly existing and in good standing under the National Bank Act, 12 U.S.C. \u00a7 1
\net seq<\/em>. The deposit accounts of Bank are insured up to applicable
\nlimits (or fully insured if there is no limit) by the Deposit Insurance Fund
\n(“DIF<\/u>“), which is administered by the Federal Deposit Insurance
\nCorporation (the “FDIC<\/u>“), and no proceedings for the termination or
\nrevocation of such insurance are pending or, to the Knowledge of the Company,
\nthreatened. Bank has the corporate (or similar) power and authority to own or
\nlease all of the assets owned or leased by it and to conduct its business in all
\nmaterial respects as it is now being conducted. Bank is duly licensed or
\nqualified to do business and in good standing in all jurisdictions (1) in which
\nthe nature of the activities conducted by Bank requires such qualification and
\n(2) in which Bank owns or leases real property, other than such failures that
\nwould not have any material impact on Bank. The articles of association of Bank
\ncomply in all material respects with applicable Law. A true, complete and
\ncorrect copy of each of the articles of association of Bank and the bylaws of
\nBank, as amended and as currently in effect, has been delivered or made
\navailable to Purchaser.<\/p>\n

(iii) Each of the Company153s Subsidiaries (other than Bank) is a corporation
\nor other legal entity duly incorporated or duly organized, validly existing and
\nin good standing under the laws of its jurisdiction of organization. Each such
\nSubsidiary has the corporate (or similar) power and authority to own or lease
\nall of the assets owned or leased by it and to conduct its business in all
\nmaterial respects as it is now being conducted. Each such Subsidiary is duly
\nlicensed or qualified to do business and in good standing as a foreign
\ncorporation or other legal entity in all jurisdictions (1) in which the nature
\nof the activities conducted by such Subsidiary requires such licensing or
\nqualification and (2) in which such Subsidiary owns or leases real property,
\nother than such failures that would not have any material impact on the Company.
\nThe articles or certificate of incorporation, certificate of trust or other
\norganizational document of each such Subsidiary comply in all material respects
\nwith applicable Law. A true, complete and correct copy of the articles or
\ncertificate of incorporation or certificate of trust and bylaws of each such
\nSubsidiary (or similar governing documents), as amended and as currently in
\neffect, has been delivered or made available to Purchaser.<\/p>\n

– 8 –<\/p>\n

\n

(b) Capitalization<\/u>. The authorized capital stock of the Company
\nconsists of 50,000,000 shares of Common Stock and 1,000,000 shares of Preferred
\nStock, par value $0.001 per share (the “Preferred Stock<\/u>“). As of the
\nclose of business on March 7, 2012, there were 32,940,687 shares of Common Stock
\noutstanding and no shares of Preferred Stock outstanding. As of the date of this
\nAgreement, there were warrants to purchase 15,120 shares of Common Stock held by
\nthe Treasury Department (such warrants, the “Treasury Warrants<\/u>“). All of
\nthe issued and outstanding shares of Common Stock have been duly authorized and
\nvalidly issued and are fully paid and nonassessable and were not issued in
\nviolation of or subject to any preemptive rights or other rights to subscribe
\nfor or purchase securities. No bonds, debentures, notes or other indebtedness
\nhaving the right to vote on any matters on which the stockholders of the Company
\nmay vote (“Voting Debt<\/u>“) are issued and outstanding. As of the date of
\nthis Agreement, except (i) pursuant to any cashless exercise provisions of any
\nCompany Options or pursuant to the surrender of shares to the Company or the
\nwithholding of shares by the Company to cover Tax withholding obligations under
\nthe Benefit Plans, (ii) as required to satisfy obligations in respect of
\noutstanding Company Options and Company Stock Awards and (iii) the Treasury
\nWarrant to purchase up to 15,120 shares of Common Stock sold by the Company to
\nthe Treasury Department pursuant to that certain Exchange Agreement dated as of
\nJuly 26, 2010, the Company does not have and is not bound by any outstanding
\nsubscriptions, options, calls, commitments or Contracts of any character calling
\nfor the purchase or issuance of, or securities or rights convertible into or
\nexchangeable for, any shares of Common Stock or Preferred Stock or any other
\nequity securities of the Company or Voting Debt or any securities representing
\nthe right to purchase or otherwise receive any shares of capital stock of the
\nCompany (including any rights plan or agreement). Section 3.02(b) of the Company
\nDisclosure Schedule sets forth a table listing, as of the date of this
\nAgreement, the outstanding series of trust preferred and subordinated debt
\nsecurities of the Company, Bank and all of the Company153s other Subsidiaries, and
\nall such information is accurate and complete.<\/p>\n

(c) Subsidiaries<\/u>. With respect to Bank and each of the Company153s other
\nSubsidiaries, (i) all the issued and outstanding shares of such entity153s capital
\nstock have been duly authorized and validly issued, are fully paid and
\nnonassessable and were not issued in violation of or subject to any preemptive
\nrights or other rights to subscribe for or purchase securities, and (ii) such
\nentity does not have and is not bound by any outstanding subscriptions, options,
\ncalls, commitments or Contracts of any character calling for the purchase or
\nissuance of, or securities or rights convertible into or exchangeable for, any
\nshares of such entity153s capital stock or any other equity securities or Voting
\nDebt or any securities representing the right to purchase or otherwise receive
\nany shares of capital stock of such entity (including any rights plan or
\nagreement). Section 3.02(c) of the Company Disclosure Schedule sets forth as of
\nthe date of this Agreement (1) each of the Company153s Subsidiaries and the
\nownership interest of the Company in each such Subsidiary, as well as the
\nownership interest of any other Person or Persons in each such Subsidiary and
\n(2) the Company153s or its Subsidiaries153 capital stock, equity interest or other
\ndirect or indirect ownership interest in any other Person other than (x)
\nsecurities in a publicly traded company held for investment by the Company or
\nany of its Subsidiaries and consisting of less than one percent (1%) of the
\noutstanding capital stock of such company and (y)<\/p>\n

– 9 –<\/p>\n

\n

securities held in a fiduciary capacity for the benefit of customers. The
\nCompany does not own, directly or indirectly, any voting interest in any Person
\nthat requires an additional filing by Purchaser under the Hart-Scott-Rodino
\nAntitrust Improvements Act of 1976.<\/p>\n

(d) Authorization and Action<\/u>.<\/p>\n

(i) The Company has all requisite corporate power and authority and has taken
\nall corporate action necessary in order to execute, deliver and perform its
\nobligations under this Agreement and to consummate the transactions contemplated
\nhereby, subject only, with respect to the Merger, to adoption of this Agreement
\nby the holders of a majority of the outstanding Shares (the “Requisite
\nStockholder Approval<\/u>“). This Agreement has been duly and validly executed
\nand delivered by the Company and, assuming due authorization, execution and
\ndelivery by Purchaser and Merger Sub, is a valid and binding obligation of the
\nCompany enforceable against the Company in accordance with its terms (except as
\nenforcement may be limited by bankruptcy, insolvency, fraudulent transfer,
\nreorganization, moratorium and similar Laws of general applicability relating to
\nor affecting creditors153 rights and to general equitable principles, regardless
\nof whether such enforceability is considered in a proceeding in equity or at law
\n(the “Bankruptcy and Equity Exception<\/u>“). No other corporate proceedings,
\nother than the Requisite Stockholder Approval, are necessary for the execution
\nand delivery by the Company of this Agreement, the performance by it of its
\nobligations hereunder or the consummation by it of the transactions contemplated
\nhereby.<\/p>\n

(ii) The Company Board has received the opinion of its financial advisor,
\nSandler O153Neill + Partners, L.P., to the effect that, subject to the
\nassumptions, qualifications and limitations set forth therein, as of the date of
\nsuch opinion, the Per Share Merger Consideration is fair to the holders of the
\nShares from a financial point of view. It is agreed and understood that such
\nopinion is for the benefit of the Company Board and may not be relied upon by
\nPurchaser or Merger Sub.<\/p>\n

(iii) The Company Board, by a unanimous vote thereof, has adopted resolutions
\n(1) determining that this Agreement and such transactions are fair to, and in
\nthe best interests of, the Company and its stockholders, (2) approving and
\ndeclaring advisable this Agreement and the transactions contemplated hereby and
\n(3) recommending that the Company153s stockholders adopt this Agreement (such
\nrecommendation, the “Company Board Recommendation<\/u>“).<\/p>\n

(iv) Neither the execution and delivery by the Company of this Agreement, nor
\nthe consummation of the transactions contemplated hereby, nor compliance by the
\nCompany with any of the provisions hereof, will (1) violate, conflict with, or
\nresult in a breach of any provision of, or constitute a default (or an event
\nwhich, with notice or lapse of time or both, would constitute a default) under,
\nor result in the termination of, or result in the loss to the Company or any of
\nits Subsidiaries of any benefit or creation of any right on the part of any
\nthird party under, or accelerate the performance required by, or result in a
\nright of termination or acceleration of, or result in the creation of any
\nEncumbrances upon any of the material properties or assets of the Company or any
\nof its Subsidiaries under any of the terms, conditions or provisions of (x)<\/p>\n

– 10 –<\/p>\n

\n

the certificate of incorporation or bylaws (or similar governing documents)
\nof the Company or the certificate of incorporation, charter, bylaws or other
\ngoverning instrument of any of its Subsidiaries or (y) any material Contract or
\nlicense to which the Company or any of its Subsidiaries is a party or by which
\nit may be bound, or to which the Company or any of its Subsidiaries or any of
\nthe properties or assets of the Company or any of its Subsidiaries may be
\nsubject, or (2) subject to compliance with the statutes and regulations referred
\nto in Section 3.02(e), violate any Law or Order applicable to the Company or any
\nof its Subsidiaries or any of their respective properties or assets, except in
\nthe case of clause (1)(y) this Section 3.02(d)(iv) as would not reasonably be
\nexpected to result in costs to the Company or any of its Subsidiaries (including
\nthe Surviving Corporation after the Closing) in excess of $500,000.<\/p>\n

(e) Consents and Approvals<\/u>. Other than (i) applicable requirements of
\nthe Securities Act, the Exchange Act, and state securities takeover and “blue
\nsky” laws, as may be required in connection with this Agreement and the
\ntransactions contemplated hereby, (ii) the filing of the Delaware Certificate of
\nMerger, (iii) the filing of applications and notices with the Board of Governors
\nof the Federal Reserve System (the “Federal Reserve<\/u>“) and the Office of
\nthe Comptroller of the Currency (the “OCC<\/u>“) and approval thereof and the
\nexpiration of any related waiting periods, (iv) such applications, filings and
\nconsents as may be required under the banking laws of any state, and approval
\nthereof, (v) such other consents of, filings with, authorizations or approvals
\nfrom and registrations with any Governmental Entity which if not obtained or
\nmade would not, individually or in the aggregate, be material to the Company and
\nits Subsidiaries taken as a whole (clauses (iii) through (v) collectively, the
\n“Regulatory Consents<\/u>“), and (vi) the JFSA Approval, no notice to,
\napplication or filing with, or consent of, any Governmental Entity or any other
\nPerson is necessary in connection with the Company153s execution, delivery or
\nperformance of this Agreement, and the consummation of the Merger, the Bank
\nMerger and the other transactions contemplated hereby. A list of all Requisite
\nRegulatory Consents and any other Regulatory Consents that are required by the
\nCompany, its Subsidiaries or any of their Affiliates as of the date hereof is
\ndisclosed in Section 3.02(e) of the Company Disclosure Schedule.<\/p>\n

(f) Accountants<\/u>. Ernst & Young LLP, which has expressed its
\nopinion with respect to the consolidated financial statements contained in its
\nAnnual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed
\nby it with the SEC on March 28, 2011 (the “Company 10-K<\/u>“), was as of the
\ndate of such opinion registered independent public accountants, within the
\nmeaning of the Code of Professional Conduct of the American Institute of
\nCertified Public Accountants, as required by the Securities Act and by the rules
\nof the Public Company Accounting Oversight Board. KPMG LLP, which replaced Ernst
\n& Young LLP on June 10, 2011, is as of the date hereof registered
\nindependent public accountants, within the meaning of the Code of Professional
\nConduct of the American Institute of Certified Public Accountants, as required
\nby the Securities Act and by the rules of the Public Company Accounting
\nOversight Board.<\/p>\n

(g) Financial Statements<\/u>.<\/p>\n

(i) The Company has previously made available to Purchaser copies of (1) the
\naudited consolidated statements of financial condition of the Company and its\n<\/p>\n

– 11 –<\/p>\n

\n

Subsidiaries as of December 31 for the fiscal years 2009 and 2010, and the
\nrelated consolidated statements of operations, of comprehensive income, of
\nchanges in stockholders153 equity, and of cash flows for the fiscal years 2009 and
\n2010, inclusive, as reported in the Company 10-K, in each case accompanied by
\nthe audit report of Ernst & Young LLP, and (2) (x) the unaudited
\nconsolidated statements of financial condition of the Company and its
\nSubsidiaries as of December 31 for the fiscal year 2011 and the related
\nunaudited consolidated statements of operations, of comprehensive income, of
\nchanges in stockholders153 equity and of cash flows for the fiscal year ended
\nDecember 31, 2011 (the “Unaudited 2011 Financials<\/u>“) and (y) the unaudited
\nconsolidated statements of financial condition of the Company and its
\nSubsidiaries as of January 31, 2011 and the related unaudited consolidated
\nstatements of operations, of comprehensive income, of changes in stockholders153
\nequity and of cash flows for the one (1)-month period ended January 31, 2012
\n(the “Interim Financials<\/u>” and (1) and (2) collectively, and including the
\nrelated notes, where applicable, the “Financial Statements<\/u>“).<\/p>\n

(ii) Each of the Financial Statements has been prepared, and each of the
\nfinancial statements (including the Audited 2011 Financials) to be filed by the
\nCompany with the SEC after the date of this Agreement and prior to the Closing
\nwill be prepared, in accordance with GAAP consistently applied throughout the
\nperiods covered by each such statement (except for inconsistencies in the
\napplication of GAAP as indicated in such Financial Statements or in the notes
\nthereto), is consistent with the books and records of the Company, and fairly
\npresents, in all material respects, the consolidated financial condition of the
\nCompany as of the respective dates and the results of operations and cash flows
\nof the Company for the respective periods then ended, as applicable, subject to,
\nin the case of the Interim Financials (1) the absence of notes and schedules and
\n(2) normal year-end adjustments, and in the case of the Unaudited 2011
\nFinancials, the absence of certain notes and schedules.<\/p>\n

(iii) Since December 31, 2010, there have been no significant changes in the
\n“off-balance sheet arrangements,” as defined in and disclosed under Item 303 of
\nRegulation S-K under the Securities Act, to which the Company or any of its
\nSubsidiaries is a party.<\/p>\n

(iv) The books and records of the Company and its Subsidiaries in all
\nmaterial respects have been, and are being, maintained in accordance with
\napplicable legal and accounting requirements and reflect only actual
\ntransactions. Ernst & Young LLP was not dismissed as independent public
\naccountants of the Company as a result of or in connection with any
\ndisagreements with the Company on a matter of accounting principles or
\npractices, financial statement disclosure or auditing scope or procedure.<\/p>\n

(h) Reports; Books and Records<\/u>.<\/p>\n

(i) Since December 31, 2009, each of the Company and each of its Subsidiaries
\nhas timely filed or furnished all material reports, registrations, documents,
\nfilings, statements and submissions, together with any amendments thereto, that
\nit was required to file with or furnish to any Governmental Entity or any SRO
\n(the foregoing, collectively, the “Company Reports<\/u>“) and has paid all
\nmaterial fees and assessments due<\/p>\n

– 12 –<\/p>\n

\n

and payable in connection therewith. As of their respective dates of filing
\nor furnishing, or, if amended, as of the date of the last such amendment prior
\nto the date of this Agreement, the Company Reports complied in all material
\nrespects with all statutes and applicable rules and regulations of the
\napplicable Governmental Entities or SROs. As of the date of this Agreement,
\nthere are no outstanding comments from the SEC or any other Governmental Entity
\nor any SRO with respect to any such Company Report. In the case of each such
\nCompany Report filed with or furnished to the SEC, such Company Report did not,
\nas of its date or if amended prior to the date of this Agreement, as of the date
\nof such amendment and any Company Reports filed with or furnished to the SEC
\nsubsequent to the date of this Agreement and prior to the Closing will not,
\ncontain an untrue statement of a material fact or omit to state a material fact
\nrequired to be stated therein or necessary in order to make the statements made
\nin it, in light of the circumstances under which they were made, not misleading
\nand complied as to form in all material respects with the applicable
\nrequirements of the Securities Act and the Exchange Act. With respect to all
\nother Company Reports filed since December 31, 2009 or to be filed subsequent to
\nthe date of this Agreement and prior to the Closing, the Company Reports will be
\ncomplete and accurate in all material respects as of their respective dates, or
\nthe dates of their respective amendments. No executive officer of the Company or
\nany of its Subsidiaries has failed in any respect to make the certifications
\nrequired of him or her under Sections 302 or 906 of the Sarbanes-Oxley Act of
\n2002 (collectively, the “Sarbanes-Oxley Act<\/u>“). None of the Company153s
\nSubsidiaries is required to file periodic reports with the SEC pursuant to
\nSections 13 or 15(d) of the Exchange Act. Except for normal examinations
\nconducted by a Governmental Entity or SRO in the regular course of the business
\nof the Company and its Subsidiaries, no Governmental Entity or SRO has initiated
\nany proceeding or, to the Knowledge of the Company, investigation into the
\nbusiness or operations of the Company or any of its Subsidiaries since January
\n1, 2010. There are no unresolved violations set forth in any report relating to
\nany examinations or inspections by any Governmental Entity or SRO of any of the
\nCompany and its Subsidiaries. The Company and its Subsidiaries have fully
\nresolved all “matters requiring attention,” “matters requiring immediate
\nattention” or similar items as identified by any such Governmental Entity or
\nSRO.<\/p>\n

(ii) The records, systems, controls, data and information of each of the
\nCompany and each of its Subsidiaries are recorded, stored, maintained and
\noperated under means (including any electronic, mechanical or photographic
\nprocess, whether computerized or not) that are under the exclusive ownership and
\ndirect control of the Company or its Subsidiaries or their accountants
\n(including all means of access thereto and therefrom), except as would not
\nreasonably be expected to have a material adverse effect on the Company153s system
\nof internal accounting controls.<\/p>\n

(iii) Each of the Company and each of its Subsidiaries maintains a system of
\ninternal accounting controls sufficient to provide reasonable assurances
\nregarding the reliability of financial reporting and the preparation of
\nfinancial statements for external purposes in accordance with GAAP, and that (1)
\ntransactions are executed in accordance with management153s general or specific
\nauthorization, (2) transactions are recorded as necessary to permit preparation
\nof financial statements in conformity with generally accepted accounting
\nprinciples and to maintain accountability for assets, (3)<\/p>\n

– 13 –<\/p>\n

\n

access to assets is permitted only in accordance with management153s general or
\nspecific authorization and (4) the recorded amount for assets is compared with
\nthe existing assets at reasonable intervals and appropriate action is taken with
\nrespect to any differences.<\/p>\n

(iv) The Company maintains disclosure controls and procedures required by
\nRule 13a-15 or 15d-15 under the Exchange Act. Such disclosure controls and
\nprocedures are designed and maintained to ensure that information required to be
\ndisclosed by the Company is recorded and reported on a timely basis to the
\nindividuals responsible for the preparation of the Company153s filings with the
\nSEC and other public disclosure documents. The Company maintains internal
\ncontrol over financial reporting (as defined in Rule 13a-15 or 15d-15, as
\napplicable, under the Exchange Act). Such internal control over financial
\nreporting is designed and maintained to provide reasonable assurance regarding
\nthe reliability of financial reporting and the preparation of financial
\nstatements for external purposes in accordance with generally accepted
\naccounting principles and includes policies and procedures that (1) pertain to
\nthe maintenance of records that in reasonable detail accurately and fairly
\nreflect the transactions and dispositions of the assets of the Company, (2)
\nprovide reasonable assurance that transactions are recorded as necessary to
\npermit preparation of financial statements in accordance with generally accepted
\naccounting principles, and that receipts and expenditures of the Company are
\nbeing made only in accordance with authorizations of management and directors of
\nthe Company and (3) provide reasonable assurance regarding prevention or timely
\ndetection of unauthorized acquisition, use or disposition of the Company153s
\nassets that could have a material effect on its financial statements. The
\nCompany has disclosed, based on the most recent evaluation of its Chief
\nExecutive Officer and its Chief Financial Officer prior to the date of this
\nAgreement, to the Company153s auditors and the audit committee of the Company
\nBoard (A) any significant deficiencies in the design or operation of its
\ninternal controls over financial reporting that are reasonably likely to
\nadversely affect the Company153s ability to record, process, summarize and report
\nfinancial information and has identified for the Company153s auditors and audit
\ncommittee of the Company Board any material weaknesses in internal control over
\nfinancial reporting and (B) any fraud, whether or not material, that involves
\nmanagement or other employees who have a significant role in the Company153s
\ninternal control over financial reporting. The Company has made available to
\nPurchaser (1) any such written disclosure made by management to the Company153s
\nauditors and audit committee since December 31, 2010 and (2) any written
\ncommunication since December 31, 2010 made by management or the Company153s
\nauditors to the audit committee required or contemplated by listing standards of
\nthe NASDAQ Stock Market (“NASDAQ<\/u>“), the audit committee153s charter or
\nprofessional standards of the Public Company Accounting Oversight Board. Since
\nDecember 31, 2009, no complaints from any source regarding accounting, internal
\naccounting controls or auditing matters, and no concerns from the Employees
\nregarding questionable accounting or auditing matters, have been received by the
\nCompany. The Company has made available to Purchaser a summary of all complaints
\nor concerns relating to other matters made since December 31, 2010 through the
\nCompany153s whistleblower hot line or equivalent system for receipt of employee
\nconcerns regarding possible violations of Law. No attorney representing the
\nCompany or any of its Subsidiaries, whether or not employed by the Company or
\nany of its Subsidiaries, has reported evidence of a violation of securities
\nlaws, breach of<\/p>\n

– 14 –<\/p>\n

\n

fiduciary duty or similar violation by the Company or any of its officers,
\ndirectors, employees or agents to the Company153s chief legal officer, audit
\ncommittee (or other committee designated for the purpose) of the Company Board
\nor the Company Board pursuant to the rules adopted pursuant to Section 307 of
\nthe Sarbanes-Oxley Act or any Company policy contemplating such reporting,
\nincluding in instances not required by those rules.<\/p>\n

(i) Real Property<\/u>.<\/p>\n

(i) Except in any such case as would not, individually or in the aggregate,
\nreasonably be expected to have a Material Adverse Effect, with respect to the
\nreal property owned by the Company or its Subsidiaries (the “Owned Real
\nProperty<\/u>“), (1) the Company or one of its Subsidiaries, as applicable, has
\ngood and marketable title to the Owned Real Property, free and clear of any
\nEncumbrance, and (2) there are no outstanding options or rights of first refusal
\nto purchase the Owned Real Property, or any portion of the Owned Real Property
\nor interest therein.<\/p>\n

(ii) With respect to the real property leased or subleased to the Company or
\nits Subsidiaries (the “Leased Real Property<\/u>“), the lease or sublease for
\nsuch property is valid, legally binding, enforceable and in full force and
\neffect, and neither the Company nor any of its Subsidiaries is in breach of or
\ndefault under such lease or sublease, and no event has occurred which, with
\nnotice, lapse of time or both, would constitute a breach or default by any of
\nthe Company or its Subsidiaries or permit termination, modification or
\nacceleration by any third party thereunder, or prevent, materially delay or
\nmaterially impair the consummation of the transactions contemplated by this
\nAgreement except in each case, for such invalidity, failure to be binding,
\nunenforceability, ineffectiveness, breaches, defaults, terminations,
\nmodifications, accelerations or repudiations that would not, individually or in
\nthe aggregate, reasonably be expected to have a Material Adverse Effect.<\/p>\n

(iii) Section 3.02(i)(iii) of the Company Disclosure Schedule contains a true
\nand complete list, as of the date hereof, of all Owned Real Property (together
\nwith all land, buildings, structures, fixtures and improvements located
\nthereon). Section 3.02(i)(iii) of the Company Disclosure Schedule sets forth (x)
\na description of the principal functions conducted as of the date hereof at each
\nparcel of Owned Real Property and (y) a correct street address and such other
\ninformation as is reasonably necessary to identify each parcel of Owned Real
\nProperty.<\/p>\n

(j) Taxes<\/u>. Except as would not reasonably be expected to have,
\nindividually or in the aggregate, a Material Adverse Effect and except as set
\nforth in Section 3.02(j) of the Company Disclosure Schedule: (1) each of the
\nCompany and each of its Subsidiaries has duly and timely filed (including,
\npursuant to applicable extensions) all Tax Returns required to be filed by it
\nand all such Tax Returns are correct and complete. Each of the Company and each
\nof its Subsidiaries has paid in full all Taxes due or made adequate provision in
\nthe financial statements of the Company (in accordance with GAAP) for any such
\nTaxes, whether or not shown as due on such Tax Returns; (2) no deficiencies for
\nany Taxes have been proposed, asserted or assessed, in each case in writing,
\nagainst or with respect to any Taxes due by, or Tax<\/p>\n

– 15 –<\/p>\n

\n

Returns of, the Company or any of its Subsidiaries which deficiencies have
\nnot since been resolved; (3) there are no Encumbrances for Taxes upon the assets
\nof either the Company or its Subsidiaries except for statutory Encumbrances for
\nTaxes not yet due; (4) neither the Company nor any of its Subsidiaries has been
\na “distributing corporation” or a “controlled corporation” in any distribution
\noccurring during the last two (2) years in which the parties to such
\ndistribution treated the distribution as one to which Code Section 355 is
\napplicable; (5) neither the Company nor any of its Subsidiaries has engaged in
\nany “listed transaction” within the meaning of Treasury Regulations section
\n1.6011-4(b)(2); (6) neither the Company nor any of its Subsidiaries has engaged
\nin a transaction of which it made disclosure to any taxing authority to avoid
\npenalties under Section 6662(d) or any comparable provision of state, foreign or
\nlocal Law; (7) neither the Company nor any of its Subsidiaries has participated
\nin any “tax amnesty” or similar program offered by any taxing authority to avoid
\nthe assessment of penalties or other additions to Tax; (8) the Company and each
\nof its Subsidiaries have complied in all respects with all requirements to
\nreport information for Tax purposes to any individual or taxing authority, and
\nhave collected and maintained all requisite certifications and documentation in
\nvalid and complete form with respect to any such reporting obligation,
\nincluding, without limitation, valid Internal Revenue Service Forms W-8 and W-9;
\n(9) no written claim has been made within the past three (3) years by a Tax
\nAuthority in a jurisdiction where the Company or any of its Subsidiaries, as the
\ncase may be, does not file Tax Returns that the Company, Bank or any of the
\nCompany153s other Subsidiaries, as the case may be, is or may be subject to Tax by
\nthat jurisdiction; (10) neither the Company nor any of its Subsidiaries has
\ngranted any currently effective waiver, extension or comparable consent
\nregarding the application of the statute of limitations with respect to any
\nTaxes or Tax Return that is outstanding, nor has any request for any such waiver
\nor consent been made; (11) neither the Company nor any of its Subsidiaries has
\nbeen or is in violation (or with notice or lapse of time or both, would be in
\nviolation) of any applicable Law relating to the payment or withholding of Taxes
\n(including, without limitation, withholding of Taxes pursuant to Sections 1441
\nand 1442 of the Code or any similar provisions of state, local or foreign law);
\n(12) each of the Company and each of its Subsidiaries has duly and timely
\nwithheld from employee salaries, wages and other compensation and paid over to
\nthe appropriate taxing authority all amounts required to be so withheld and paid
\nover for all taxable periods within the past three (3) years under all
\napplicable Laws; (13) no audits or investigations by any taxing authority
\nrelating to any Tax Returns of any of the Company or any of its Subsidiaries is
\nin progress, nor has the Company or any of its Subsidiaries received written
\nnotice from any taxing authority of the commencement of any audit not yet in
\nprogress; (14) there are no outstanding and currently effective powers of
\nattorney enabling any person or entity not a party to this Agreement to
\nrepresent the Company or any of its Subsidiaries with respect to Tax matters;
\n(15) within the past four (4) years, neither the Company nor any of its
\nSubsidiaries has applied for, been granted, or agreed to any accounting method
\nchange for which it will be required to take into account any adjustment under
\nCode Section 481 after the Closing; (16) during the period between September 1,
\n2010 and the date hereof, neither the Company nor any of its Subsidiaries has
\nundergone an “ownership change” within the meaning of Code Section 382(g); and
\n(17) neither the Company nor any of its Subsidiaries is liable for Taxes of any
\nother Person (other than the Company or any of its Subsidiaries) pursuant to a
\ntax indemnity, tax sharing or other similar agreement (other than pursuant to
\nlease agreements, loan agreements, financing arrangements, commercial agreements
\nentered into in the ordinary course of business, or Benefit Plans).<\/p>\n

– 16 –<\/p>\n

\n

(k) Absence of Certain Changes<\/u>. Since December 31, 2010, and except as
\nPreviously Disclosed, (1) the Company and its Subsidiaries have conducted their
\nrespective businesses in all material respects in the ordinary course of
\nbusiness and consistent with past practice, (2) the Company has not made or
\ndeclared any distribution in cash or in kind to its stockholders or issued or
\nrepurchased any shares of its capital stock or other equity interests, (3) there
\nhas been no material change in any method of accounting or accounting practice
\nby the Company or any of its Subsidiaries (except, in each case, as indicated in
\nthe Financial Statements or in the notes thereto), (4) no fact, event, change,
\ncondition, development, circumstance or effect has occurred that has had, or
\nwould reasonably be expected to have, a Material Adverse Effect, and (5) no
\nmaterial default (or event which, with notice or lapse of time, or both, would
\nconstitute a material default) exists on the part of the Company or any of its
\nSubsidiaries or, to their Knowledge, on the part of any other party, in the due
\nperformance and observance of any term, covenant or condition of any Contract to
\nwhich the Company or any of its Subsidiaries is a party and which is,
\nindividually or in the aggregate, material to the financial condition of the
\nCompany and its Subsidiaries, taken as a whole.<\/p>\n

(l) No Undisclosed Liabilities<\/u>. Neither the Company nor any of its
\nSubsidiaries has any liabilities or obligations of any nature and is not an
\nobligor under any guarantee, keepwell or other similar Contract (absolute,
\naccrued or contingent) or otherwise except for (i) liabilities or obligations
\nreflected in or reserved against in the Company153s consolidated balance sheet as
\nof December 31, 2010 and (ii) liabilities that have arisen since December 31,
\n2010 in the ordinary course of business and consistent with past practice and
\nthat have either been Previously Disclosed or would not have, individually or in
\nthe aggregate, a material impact on the Company and its Subsidiaries, taken as a
\nwhole.<\/p>\n

(m) Commitments and Contracts<\/u>.<\/p>\n

(i) The Company has Previously Disclosed or provided (by hard copy,
\nelectronic data room or otherwise) to Purchaser or its representatives true,
\ncorrect and complete copies of each Material Contract to which the Company or
\nany of its Subsidiaries is, as of the date hereof, a party or subject.
\n“Material Contract<\/u>” means each of the following (whether written or oral,
\nexpress or implied):<\/p>\n

(1) any Contract which is a “material contract” within the meaning of Item
\n601(b)(10) of Regulation S-K to be performed in whole or in part after the date
\nof this Agreement;<\/p>\n

(2) any Contract with respect to the employment or service of any current or
\nformer directors, officers, employees or consultants of the Company or any of
\nits Subsidiaries, in each case involving an annual base salary, annual fee or
\nother form of cash compensation, as applicable, to be paid by the Company or any
\nof its Subsidiaries in excess of $150,000, or any Contract with a current or
\nformer director, officer or employee with change-in-control or severance or
\nother provisions resulting in or causing the acceleration of any compensation
\nbenefit upon a change in control or termination of employment following a change
\nin control;<\/p>\n

– 17 –<\/p>\n

\n

(3) any Contract containing any standstill or similar agreement pursuant to
\nwhich one Person has agreed not to acquire assets or securities of another
\nPerson;<\/p>\n

(4) any Related Party Contract;<\/p>\n

(5) any Contract (x) that restricts the ability of the Company or any of its
\nSubsidiaries to compete in any business or geographic area or any particular
\nmedium or (y) that grants a Person other than the Company or any of its
\nSubsidiaries “most favored nation” status or “exclusivity” or similar rights;\n<\/p>\n

(6) any Contract involving the payment or receipt of royalties or similar
\npayments of more than $250,000 in the aggregate calculated based upon the
\nrevenues or income of the Company or its Subsidiaries or income or revenues
\nrelated to any product or service of the Company or any of its Subsidiaries;\n<\/p>\n

(7) any Contract with a labor union or guild (including any collective
\nbargaining agreement);<\/p>\n

(8) any Contract which grants any person a right of first refusal, right of
\nfirst offer or similar right with respect to any material properties, assets or
\nbusinesses of the Company or any of its Subsidiaries;<\/p>\n

(9) any Contract (x) having as its principal subject matter the agreement of
\nthe Company or any of its Subsidiaries to indemnify any Person, (y) providing
\nfor indemnification by the Company or any of its Subsidiaries of any Person and
\nthat could reasonably be expected to result in an indemnification obligation of
\nthe Company or any of its Subsidiaries in excess of $25,000, or (z) providing
\nfor indemnification by the Company or any of its Subsidiaries of any current or
\nformer director, officer or employee of the Company or any of its Subsidiaries;\n<\/p>\n

(10) any Contract that contains a put, call or similar right pursuant to
\nwhich the Company or any of its Subsidiaries could be required to purchase or
\nsell, as applicable, assets that have a fair market value or purchase price of
\nmore than $250,000 or any equity interests of any Person;<\/p>\n

(11) any indenture, mortgage, promissory note, loan agreement, guarantee,
\nsale and leaseback agreement, capitalized lease or other agreement or commitment
\nfor the borrowing by the Company or any of its Subsidiaries of money or the
\ndeferred purchase price of property in excess of $1,000,000 (in either case,
\nwhether incurred, assumed, guaranteed or secured by any asset), or any other
\nContract including provisions whereby the Company or any of its Subsidiaries is
\nguaranteeing the obligations of or agreeing to provide financial support to or
\non behalf of a Person (other than to or on behalf of the Company or one of its
\nSubsidiaries);<\/p>\n

– 18 –<\/p>\n

\n

(12) any lease of real property that provides for annual payments of $300,000
\nor more;<\/p>\n

(13) any license, franchise or similar Contract material to the business and
\noperations of the Company and its Subsidiaries;<\/p>\n

(14) any Contract for the purchase, sale or lease of materials, supplies,
\ngoods, services, equipment or other assets (other than those specified elsewhere
\nin this definition) that provides for either (i) annual payments or obligations
\nof $300,000 or more, or (ii) aggregate payments or obligations of $750,000 or
\nmore;<\/p>\n

(15) any partnership, joint venture or other similar agreement or
\narrangement;<\/p>\n

(16) any Contract pursuant to which (x) the Company or any of its
\nSubsidiaries grants a license or other right to use the Company Proprietary
\nRights to a third person and y) a third person grants a license or other right
\nto the Company or any of its Subsidiaries to any Proprietary Rights (but
\nexcluding licenses to commercially available “click-wrap” or “shrink-wrap”
\nsoftware);<\/p>\n

(17) any Contract relating to the acquisition or disposition of any material
\nbusiness or material assets (whether by merger, sale of stock or assets or
\notherwise), which acquisition or disposition is not yet complete or where such
\nContract contains continuing material obligations of the Company or any of its
\nSubsidiaries;<\/p>\n

(18) any agreement or consent decree entered into with a Governmental Entity
\npertaining to alleged violations of Law;<\/p>\n

(19) any Contract that is not terminable by the Company upon sixty (60) days
\nor shorter notice without penalty or premium of less than $500,000; and<\/p>\n

(20) any Contract that provides for the imposition of any material
\nEncumbrance on any assets of the Company.<\/p>\n

(ii) Each of the Material Contracts to which the Company or any of its
\nSubsidiaries is a party or subject is valid and binding on the Company or its
\nSubsidiaries, as the case may be and, to the Knowledge of the Company, each
\nother party thereto, and is in full force and effect, except for such failures
\nto be valid and binding or to be in full force and effect as would not, or would
\nnot reasonably be expected to, individually or in the aggregate, have a Material
\nAdverse Effect. There is no default under any such Contracts by the Company or
\nits Subsidiaries, or to the Knowledge of the Company, by the other party
\nthereto, and no event has occurred that with the lapse of time or the giving of
\nnotice or both would constitute a default thereunder by the Company or its
\nSubsidiaries or to the Knowledge of the Company, by the other party thereto, in
\neach case except as would not, or would not reasonably be expected to,
\nindividually or in the aggregate, have a Material Adverse Effect.<\/p>\n

– 19 –<\/p>\n

\n

(n) Litigation and Other Proceedings<\/u>. There are no pending or, to the
\nKnowledge of the Company, threatened, legal, administrative, arbitral or other
\nproceedings, claims, actions, or pending or, to the Knowledge of the Company,
\nthreatened governmental or regulatory investigations of any nature (1) against
\nthe Company or any of its Subsidiaries (excluding those of the type contemplated
\nby the following clause (2)) which would reasonably be expected to have,
\nindividually or in the aggregate, a Material Adverse Effect or (2) challenging
\nthe validity or propriety of the transactions contemplated by this Agreement.
\nThere is no material injunction, order, judgment, decree or regulatory
\nrestriction imposed upon the Company, any of its Subsidiaries or the assets of
\nthe Company or any of its Subsidiaries.<\/p>\n

(o) Compliance with Laws<\/u>.<\/p>\n

(i) The business of each of the Company and each of its Subsidiaries has not
\nbeen since December 31, 2008, and is not being, conducted in violation of any
\napplicable Law or written regulatory guideline, including the Equal Credit
\nOpportunity Act (15 U.S.C. Section 1691 et seq.<\/em>), the Fair Housing Act
\n(420 U.S.C. Section 3601 et seq.<\/em>), the Community Reinvestment Act of
\n1977, the Home Mortgage Disclosure Act (12 U.S.C. Section 2801 et
\nseq.<\/em>), the Dodd-Frank Wall Street Reform and Consumer Protection Act, the
\nBank Secrecy Act (31 U.S.C. Section 5311 et seq.<\/em>), Title III of the USA
\nPatriot Act, the Interagency Policy Statement on Retail Sales of Nondeposit
\nInvestment Products or all other applicable bank secrecy laws, fair lending laws
\nand other laws relating to discriminatory business practices and any Order
\nissued with respect to anti-money laundering by the Office of Foreign Assets
\nControl of the U.S. Treasury Department (“OFAC<\/u>“) or any other anti-money
\nlaundering statute, rule or regulation, except for violations that, individually
\nor in the aggregate, would not reasonably be expected to have a Material Adverse
\nEffect. Each of the Company and each of its Subsidiaries has all permits,
\nlicenses, franchises, authorizations, orders and approvals of, and have made all
\nfilings, applications and registrations with, Governmental Entities and SROs
\nthat are required in order to permit them to own or lease their properties and
\nassets and to carry on their business as presently conducted. Each of the
\nCompany and each of its Subsidiaries has since December 31, 2008 complied in all
\nmaterial respects with and is not in default or violation in any material
\nrespect of, and none of them is, to the Knowledge of the Company, under
\ninvestigation with respect to, or, to the Knowledge of the Company, has been
\nthreatened to be charged with or given notice of, any material violation of, any
\napplicable Law or Order of any Governmental Entity or SRO. Except for statutory
\nor regulatory restrictions of general application, no Governmental Entity or SRO
\nhas placed any material restriction on the business or properties of the Company
\nor any of its Subsidiaries that remains in effect. Since December 31, 2010,
\nneither the Company nor any of its Subsidiaries has received any written
\nnotification or communication from any Governmental Entity or SRO (1) asserting
\nthat the Company or any of its Subsidiaries is not in material compliance with
\nany statutes, regulations or ordinances, (2) threatening to revoke any permit,
\nlicense, franchise, authorization, order or approval or (3) threatening or
\ncontemplating revocation or limitation of, or which would have the effect of
\nrevoking or limiting, FDIC deposit insurance.<\/p>\n

– 20 –<\/p>\n

\n

(ii) Neither the Company nor any of its Subsidiaries, nor any director,
\nofficer, employee or Affiliate of either the Company or any of its Subsidiaries,
\nnor, to the Knowledge of the Company, any agent or other Person acting on behalf
\nof the Company or any of its Subsidiaries is currently subject to any sanctions
\nadministered by OFAC.<\/p>\n

(iii) The operations of each of the Company and each of its Subsidiaries are
\nand have been conducted at all times since December 31, 2008 in compliance with
\nthe money laundering statutes of applicable jurisdictions, the rules and
\nregulations thereunder and any related or similar rules, regulations or
\nguidelines, issued, administered or enforced by any applicable Governmental
\nEntity (collectively, the “Anti-Money Laundering Laws<\/u>“) and no action,
\nsuit or proceeding by or before any Governmental Entity involving the Company
\nand\/or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is
\npending or, to the Knowledge of the Company, threatened.<\/p>\n

(p) Fiduciary Accounts; Trust<\/u>. Each of the Company and each of its
\nSubsidiaries has properly administered in all material respects all accounts for
\nwhich it acts as a fiduciary, including accounts for which it serves as a
\ntrustee, agent, custodian, personal representative, guardian, conservator or
\ninvestment advisor, in accordance with the terms of the governing documents and
\napplicable Law. None of the Company, any of its Subsidiaries, or any director,
\nofficer or employee of the Company or of any of its Subsidiaries, has committed
\nany material breach of trust or fiduciary duty with respect to any such
\nfiduciary account. The accountings for each such fiduciary account are true and
\ncorrect, and accurately reflect, in all material respects the assets of such
\nfiduciary account.<\/p>\n

(q) Employees<\/u>. No Employees of the Company or any of its Subsidiaries
\nare represented by any labor union nor are any collective bargaining agreements
\notherwise in effect with respect to such Employees, and no labor organization or
\ngroup of Employees of the Company or any of its Subsidiaries has made a pending
\ndemand for recognition or certification, and there are no representation or
\ncertification proceedings or petitions seeking a representation proceeding
\npresently pending or, to the Knowledge of the Company, threatened to be brought
\nor filed with the National Labor Relations Board or any other labor relations
\ntribunal or authority. There are no organizing activities, strikes, work
\nstoppages, slowdowns, lockouts, material arbitrations or material grievances, or
\nother material labor disputes pending or, to the Knowledge of the Company,
\nthreatened against or involving the Company or any of its Subsidiaries and their
\nrespective employees. The Company and its Subsidiaries believe that their
\nrelations with their employees are good. As of the date hereof, no executive
\nofficer (as defined in Rule 501(f) promulgated under the Securities Act) of the
\nCompany or any of its Subsidiaries has notified the Company or any of its
\nSubsidiaries that such officer intends to leave the Company or any of its
\nSubsidiaries or otherwise terminate such officer153s employment with the Company
\nor any of its Subsidiaries. To the Knowledge of the Company, no executive
\nofficer of the Company or any of its Subsidiaries is in violation of any
\nmaterial term of any employment Contract, confidentiality, disclosure or
\nproprietary information agreement, non-competition agreement, or any other
\nContract or any restrictive covenant, and to the Knowledge of the Company, the
\ncontinued employment of each such executive officer does not subject the Company
\nor any of its Subsidiaries to any liability with respect to any of the foregoing
\nmatters. The Company and its Subsidiaries are in compliance with all notice and
\nother requirements under the Worker<\/p>\n

– 21 –<\/p>\n

\n

Adjustment and Retraining Notification Act of 1988, California Labor Code
\nsection 1400 et seq., and any other similar applicable foreign, state, or local
\nLaws relating to facility closings and layoffs. All independent contractors of
\nthe Company are properly classified under applicable state and federal Law, and
\nthe Company is in compliance with California Labor Code 226.8.<\/p>\n

(r) Company Benefit Plans<\/u>.<\/p>\n

(i) (1) Section 3.02(r)(i) of the Company Disclosure Schedule sets forth a
\ncomplete list of each material Benefit Plan and each Benefit Plan (whether or
\nnot material) that is intended to be tax-qualified under Section 401(a) or
\nSection 501(c)(9) of the Code. With respect to each Benefit Plan, the Company
\nand its Subsidiaries have complied, and are now in compliance, in all material
\nrespects, with all provisions of the Employee Retirement Income Security Act of
\n1974 (“ERISA<\/u>“), the Code and all laws and regulations applicable to such
\nBenefit Plan; and (2) each Benefit Plan has been administered in all material
\nrespects in accordance with its terms. “Benefit Plan<\/u>” means any employee
\nwelfare benefit plan within the meaning of Section 3(1) of ERISA, any employee
\npension benefit plan within the meaning of Section 3(2) of ERISA, and any bonus,
\nincentive, deferred compensation, vacation, stock purchase, stock option,
\nseverance, employment, change of control or fringe benefit plan, program,
\nagreement or policy sponsored, maintained or contributed to or required to be
\ncontributed to by the Company or any of its Subsidiaries or by any trade or
\nbusiness, whether or not incorporated (an “ERISA Affiliate<\/u>“), that
\ntogether with the Company or any of its Subsidiaries would be deemed a “single
\nemployer” within the meaning of section 4001(b) of ERISA, or to which the
\nCompany, Bank, any of the Company153s other Subsidiaries or any of their
\nrespective ERISA Affiliates is party, whether written or oral, in each case for
\nthe benefit of any director, former director, employee or former employee of the
\nCompany or any of its Subsidiaries. No Benefit Plan is maintained outside the
\njurisdiction of the United States, or covers any employee residing or working
\noutside of the United States.<\/p>\n

(ii) With respect to each material Benefit Plan and each Benefit Plan
\n(whether or not material) that is intended to be tax-qualified under Section
\n401(a) or Section 501(c)(9) of the Code, the Company has heretofore delivered or
\nmade available to Buyer true and complete copies of each of the following
\ndocuments: (1) a copy of the Benefit Plan and any amendments thereto (or if the
\nBenefit Plan is not a written plan, a description thereof); (2) a copy of the
\ntwo (2) most recent annual reports and actuarial reports, if required under
\nERISA; (3) a copy of the most recent Summary Plan Description, if required under
\nERISA with respect thereto; (4) if the Benefit Plan is funded through a trust or
\nany third party funding vehicle, a copy of the trust or other funding agreement
\nand the latest financial statements thereof; and (5) the most recent
\ndetermination letter received from the Internal Revenue Service (the
\n“IRS<\/u>“) with respect to each Benefit Plan intended to qualify under
\nSection 401 of the Code.<\/p>\n

(iii) Except as set forth in Section 3.02(r)(iii) of the Company Disclosure
\nSchedule, no claim has been made, or to the Knowledge of the Company threatened,
\nagainst the Company or any of its Subsidiaries related to any Benefit Plan,
\nincluding, without limitation, any claim related to the purchase of employer
\nsecurities or to expenses or fees paid under any defined contribution pension
\nplan other than ordinary course claims for benefits.<\/p>\n

– 22 –<\/p>\n

\n

(iv) No Benefit Plan is subject to Title IV of ERISA or described in Section
\n3(37) of ERISA, and none of the Company, any of its Subsidiaries or any of their
\nERISA Affiliates has at any time within the past six (6) years sponsored or
\ncontributed to, or has or had within the past six (6) years any liability or
\nobligation in respect of, any plan subject to Title IV or described in Section
\n3(37) of ERISA. The Company has not incurred any current or projected liability
\nin respect of post-retirement health, medical or life insurance benefits for the
\nEmployees, except as required to avoid an excise tax under Section 4980B of the
\nCode or comparable State benefit continuation laws. The Company or its
\nSubsidiaries may amend or terminate any Benefit Plan that provides for retiree
\nmedical or life benefits at any time without incurring any liability thereunder
\nother than in respect of claims incurred prior to such amendment or termination.\n<\/p>\n

(v) Each Benefit Plan intended to be “qualified” within the meaning of
\nSection 401(a) of the Code and the related trust have received a favorable
\ndetermination letter from the IRS as to qualification of the Benefit Plan under
\nSection 401(a) of the Code and exemption of the related trust from taxation
\nunder Section 501(a) of the Code that has not been revoked, and no circumstances
\nexist and no events have occurred that could reasonably be expected to adversely
\naffect the qualified status of any such Benefit Plan or the tax exempt status of
\nthe related trust. To the extent any Benefit Plan is required to be funded under
\nERISA or the Code, it is so funded and all contributions required to be made by
\napplicable law have been timely made. Any voluntary employees153 beneficiary
\nassociation within the meaning of Section 501(c)(9) of the Code that provides
\nbenefits under a Benefit Plan has (x) received an opinion letter from the IRS
\nrecognizing its exempt status under Section 501(c)(9) of the Code and (y) filed
\na timely notice with the IRS pursuant to Section 505(c) of the Code, and neither
\nthe Company nor any of its Subsidiaries is aware of circumstances that could
\nreasonably be expected to result in the loss of such exempt status under Section
\n501(c)(9) of the Code.<\/p>\n

(vi) None of the Company, any of its Subsidiaries, any Benefit Plan, any
\ntrust created under any Benefit Plan, or any trustee or administrator of any
\nBenefit Plan has engaged in a transaction in connection with which the Company
\nor any of its Subsidiaries, any plan, any such trust, or any trustee or
\nadministrator thereof, or any party dealing with any plan or any such trust
\ncould reasonably be expected to be subject to either a material civil penalty
\nassessed pursuant to Sections 409 or 502(i) of ERISA or a material tax imposed
\npursuant to Sections 4975 or 4976 of the Code.<\/p>\n

(vii) Each Benefit Plan that is a “nonqualified deferred compensation plan”
\nwithin the meaning of Section 409A of the Code and associated Treasury
\nDepartment guidance has (1) between January 1, 2005 and December 31, 2008, been
\noperated in all material respects in good faith compliance with Section 409A of
\nthe Code and Notice 2005-01 and (2) since January 1, 2009 (or such later date
\npermitted under applicable guidance), been operated in compliance with, and is
\nin documentary compliance with, in all material respects, Section 409A of the
\nCode and IRS regulations and guidance thereunder. All Company Options granted by
\nthe Company or any of its<\/p>\n

– 23 –<\/p>\n

\n

Subsidiaries to any current or former employee or director have been granted
\nwith a per share exercise price at least equal to the fair market value of the
\nunderlying stock on the date the Company Option was granted, within the meaning
\nof Section 409A of the Code and associated Treasury Department guidance.<\/p>\n

(viii) Neither the execution and delivery of this Agreement, nor the
\nconsummation of the transactions contemplated hereby will, either alone or in
\nconjunction with any other event, (A) result in any payment (including
\nseverance, unemployment compensation, “excess parachute payment” (within the
\nmeaning of Section 280G of the Code), forgiveness of indebtedness or otherwise)
\nbecoming due to any current or former employee, officer or director of the
\nCompany or any of its Subsidiaries under any Benefit Plan or otherwise, (B)
\nincrease any benefits otherwise payable under any Benefit Plan, (C) result in
\nany acceleration of the time of payment or vesting of any such benefits, (D)
\nrequire the funding or increase in the funding of any such benefits or (E)
\nresult in any limitation on the right of the Company or any of its Subsidiaries
\nto amend, merge, terminate or receive a reversion of assets from any Benefit
\nPlan or related trust. Neither the Company nor any of its Subsidiaries has
\ntaken, or permitted to be taken, any action that required, and no circumstances
\nexist that will require the funding, or increase in the funding, of any
\nbenefits, or will result, in any limitation on the right of the Company or any
\nof its Subsidiaries to amend, merge or terminate any Benefit Plan or receive a
\nreversion of assets from any Benefit Plan or related trust.<\/p>\n

(s) Risk Management Instruments<\/u>. Since December 31, 2007, all material
\nderivative instruments, including, swaps, caps, floors and option Contracts,
\nwhether entered into for the account of the Company or any of its Subsidiaries
\nor for the account of a customer of the Company or any of its Subsidiaries, were
\nentered into (i) only in the ordinary course of business and consistent with
\npast practice, (ii) in accordance with prudent banking practices and in all
\nmaterial respects with all applicable Laws and with the rules, regulations and
\npolicies of applicable Governmental Entities, and (iii) with counterparties
\nbelieved to be financially responsible at the time; and each of them constitutes
\nthe valid and legally binding obligation of the Company or one of its
\nSubsidiaries, enforceable in accordance with its terms, subject to the
\nBankruptcy and Equity Exception. Neither the Company nor any of its
\nSubsidiaries, nor, to the Knowledge of the Company, any other party thereto, is
\nin breach of any of its material obligations under any such Contract or
\narrangement. The financial position of the Company and any of its Subsidiaries,
\nas applicable, on a consolidated basis under or with respect to each such
\nderivative instrument has been reflected in its books and records and the books
\nand records of such Subsidiaries in accordance with GAAP consistently applied.\n<\/p>\n

(t) Agreements with Regulatory Agencies<\/u>. Except as set forth in
\nSection 3.02(t) of the Company Disclosure Schedule, neither the Company nor any
\nof its Subsidiaries is subject to any cease-and-desist or other similar order or
\nenforcement action issued by, or is a party to any written agreement, consent
\nagreement or memorandum of understanding with, or is a party to any commitment
\nletter or similar undertaking to, or is subject to any capital directive by, or
\nhas adopted any board resolutions at the request of, any Governmental Entity or
\nSRO (each item in this sentence, a “Regulatory Agreement<\/u>“), nor has the
\nCompany or any of its Subsidiaries been advised in writing, or, to the Knowledge
\nof the Company, orally, since<\/p>\n

– 24 –<\/p>\n

\n

December 31, 2009 by any Governmental Entity or SRO that it is considering
\nissuing, initiating, ordering, or requesting any such Regulatory Agreement. The
\nCompany and each Subsidiary are in compliance in all material respects with each
\nRegulatory Agreement to which it is a party or subject, and since December 31,
\n2009 neither the Company nor any of its Subsidiaries has received any notice
\nfrom any Governmental Entity or SRO indicating that either the Company or any of
\nits Subsidiaries is not in compliance in all material respects with any such
\nRegulatory Agreement.<\/p>\n

(u) Environmental Liability<\/u>. The Company and its Subsidiaries have at
\nall times, and at the Closing Date will have, complied in all material respects
\nwith all Laws, regulations, ordinances, requirements of any Governmental Entity,
\nand orders relating to public health, safety or the environment
\n(“Environmental Laws<\/u>“) (including all laws, regulations, ordinances and
\norders relating to releases, discharges, emissions or disposals to air, water,
\nland or groundwater, to the withdrawal or use of groundwater, to the use,
\nhandling or disposal of polychlorinated biphenyls, asbestos, mold or urea
\nformaldehyde, to the treatment, storage, disposal or management of, or to
\nexposure to, any substance regulated pursuant to any Environmental Law,
\nincluding any hazardous substances, pollutants, contaminants, toxic, hazardous
\nor other controlled, prohibited or regulated substances (“Hazardous
\nSubstances<\/u>“)). In addition, and irrespective of such compliance, neither the
\nCompany nor any of its Subsidiaries is subject to any liability for any exposure
\nto any Hazardous Substance or any contamination, environmental remediation or
\nclean-up obligations pursuant to any Environmental Law including any liability
\nunder the Comprehensive Environmental Response, Compensation and Liability Act
\nof 1980 (“CERCLA<\/u>“), or the Resource Conservation and Recovery Act of
\n1976, in each case which liability, individually or in the aggregate, would
\nreasonably be expected to have a material impact on the consummation of the
\ntransactions contemplated by this Agreement. There are no legal, administrative,
\narbitral or other proceedings, claims, actions or notices of any nature seeking
\nto impose, or that would reasonably be expected to result in the imposition of,
\non the Company or any of its Subsidiaries, any liability or obligation of the
\nCompany or any of its Subsidiaries with respect to any Environmental Law. There
\nis no private or governmental, environmental health or safety investigation or
\nremediation activity of any nature arising under any Environmental Law pending
\nor, to the Knowledge of the Company, threatened against the Company or any of
\nits Subsidiaries or any property in which the Company or any of its Subsidiaries
\nhas taken a security interest, to the Knowledge of the Company there is no
\nreasonable basis for, or circumstances that would reasonably be expected to give
\nrise to, any such proceeding, claim, action, investigation or remediation; and
\nneither the Company nor any of its Subsidiaries is subject to any agreement,
\nletter or memorandum or Order by or with any Governmental Entity or any
\nindemnity or other Contract with any third party that would reasonably be
\nexpected to impose any such environmental obligation or liability. No property
\ncurrently or formerly owned or operated by the Company or any of its
\nSubsidiaries was contaminated with any Hazardous Substance during or prior to
\nsuch period of ownership or operation in a manner that would result in any
\nliability that could reasonably be expected to have, individually or in the
\naggregate, a material impact on the Company or any of its Subsidiaries, taken as
\na whole, or a material impact on the consummation of the transactions
\ncontemplated by this Agreement. The Company has made available to Purchaser
\ncopies of all material environmental reports, studies, assessments, sampling
\ndata and other material environmental documents in its possession as of the date
\nhereof relating to the Company, its Subsidiaries or their current or former
\nproperties and properties in which the Company or any of<\/p>\n

– 25 –<\/p>\n

\n

its Subsidiaries has taken a security interest having a book value in excess
\nof $1,000,000. Each of the Company and each of its Subsidiaries complies with
\nall FDIC guidelines concerning environmental due diligence and risk management
\nin lending, loan administration, workout and foreclosure activities including
\nFDIC Bulletin FIL-14-93, and update FIL-98-2006.<\/p>\n

(v) Loan Portfolio<\/u>.<\/p>\n

(i) Except as set forth in Section 3.02(v) of the Company Disclosure
\nSchedule, as of the date hereof, neither the Company nor any of its Subsidiaries
\nis a party to any written or oral (1) loan, loan agreement, note or borrowing
\narrangement (including leases, credit enhancements, commitments, guarantees and
\ninterest-bearing assets) (collectively, “Loans<\/u>“), other than any Loan the
\nunpaid principal balance of which does not exceed $250,000, under the terms of
\nwhich the obligor was, as of January 31, 2012, over ninety (90) days delinquent
\nin payment of principal or interest or, to the Knowledge of the Company, in
\ndefault of any other material provision or (2) Loan in excess of $50,000 with
\nany director, executive officer or five percent or greater stockholder of the
\nCompany or any of its Subsidiaries, or to the Knowledge of the Company, any
\nperson, corporation or enterprise controlling, controlled by or under common
\ncontrol with any of the foregoing. Section 3.02(v) of the Company Disclosure
\nSchedule sets forth (A) all of the Loans in original principal amount in excess
\nof $250,000 of the Company or any of its Subsidiaries that as of January 31,
\n2012 were classified by the Company as “Other Loans Specially Mentioned,”
\n“Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,”
\n“Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of
\nsimilar import, together with the principal amount of and accrued and unpaid
\ninterest on each such Loan as of January 31, 2012 and the identity of the
\nborrower thereunder (and since December 31, 2009 there have been no such
\nclassifications by any Governmental Entity that are not so classified by the
\nCompany), (B) by category of Loan (i.e., commercial, consumer, etc.), all the
\nother Loans of the Company or any of its Subsidiaries that as of January 31,
\n2012 were classified as such, together with the aggregate principal amount of
\nand aggregate accrued and unpaid interest on such Loans by category as of
\nJanuary 31, 2012, and (C) each asset of the Company that as of January 31, 2012
\nwas classified as “Other Real Estate Owned” and the book value thereof.<\/p>\n

(ii) Each Loan of the Company or any of its Subsidiaries in original
\nprincipal amount in excess of $100,000 (1) is evidenced by notes, Contracts or
\nother evidences of indebtedness that are true, genuine and what they purport to
\nbe, (2) to the extent secured, has been secured by valid Encumbrances which have
\nbeen perfected and (3) to the Knowledge of the Company, is the legal, valid and
\nbinding obligation of the obligor named therein, enforceable in accordance with
\nits terms, subject to the Bankruptcy and Equity Exception.<\/p>\n

(iii) Each outstanding Loan (including Loans held for resale to investors)
\nhas been solicited and originated and is administered and serviced (to the
\nextent administered and serviced by the Company or any of its Subsidiaries), and
\nthe relevant Loan files are being maintained in all material respects in
\naccordance with the relevant loan documents, the underwriting standards of the
\nCompany and its Subsidiaries (as applicable) (and, in the case of Loans held for
\nresale to investors, the underwriting standards, if any, of the applicable
\ninvestors) and with all applicable requirements of federal, state and local
\nLaws, regulations and rules.<\/p>\n

– 26 –<\/p>\n

\n

(iv) Except as set forth in Section 3.02(v)(iv) of the Company Disclosure
\nSchedule, none of the Contracts pursuant to which the Company or any of its
\nSubsidiaries has sold Loans or pools of Loans or participations in Loans or
\npools of Loans contains any obligation to repurchase such Loans or interests
\ntherein, or entitle the buyer of such Loans or pools of Loans or participations
\nin Loans or pools of Loans or any other Person to pursue any other form of
\nrecourse against the Company or its Subsidiaries. Since December 31, 2009, there
\nhas not been any claim made by any such buyer or other Person for repurchase or
\nother similar form of recourse against the Company or any of its Subsidiaries.\n<\/p>\n

(v) Each of the Company and each of its Subsidiaries, as applicable, is
\napproved by and is in good standing: (1) as a supervised mortgagee by the
\nDepartment of Housing and Urban Development to originate and service Title I FHA
\nmortgage loans; (2) as a GNMA I and II Issuer by the Government National
\nMortgage Association; (3) by the Department of Veteran153s Affairs (“VA<\/u>“)
\nto originate and service VA loans; and (4) as a seller\/servicer by the Federal
\nNational Mortgage Association and the Federal Home Loan Mortgage Corporation to
\noriginate and service conventional residential mortgage Loans (each such entity
\nbeing referred to herein as an “Agency<\/u>” and, collectively, the
\n“Agencies<\/u>“).<\/p>\n

(vi) Except as set forth in Section 3.02(v)(vi) of the Company Disclosure
\nSchedule, neither the Company nor any of its Subsidiaries is now nor has it ever
\nbeen since December 31, 2010 subject to any fine, suspension, settlement or
\nother Contract or other administrative agreement or sanction by, or any
\nreduction in any loan purchase commitment from, any Governmental Entity or
\nAgency relating to the origination, sale or servicing of mortgage or consumer
\nLoans. Neither the Company nor any of its Subsidiaries has received any notice,
\nnor does it have any reason to believe as of the date of this Agreement, that
\nany Agency proposes to limit or terminate the underwriting authority of the
\nCompany or any of its Subsidiaries or to increase the guarantee fees payable to
\nany such Governmental Entity or Agency.<\/p>\n

(vii) Each of the Company and each of its Subsidiaries is in compliance in
\nall material respects with all applicable federal, state and local Laws, rules
\nand regulations, including the Truth-In-Lending Act and Regulation Z, the Equal
\nCredit Opportunity Act and Regulation B, the Real Estate Settlement Procedures
\nAct and Regulation X, the Fair Credit Reporting Act, the Fair Debt Collection
\nPractices Act and all Agency and other investor and mortgage insurance company
\nrequirements, relating to the origination, sale and servicing of mortgage and
\nconsumer Loans.<\/p>\n

(viii) To the Knowledge of the Company, each Loan included in a pool of Loans
\noriginated, acquired or serviced by the Company or any of its Subsidiaries (a
\n“Pool<\/u>“) meets all eligibility requirements (including all applicable
\nrequirements for obtaining mortgage insurance certificates and loan guaranty
\ncertificates) for inclusion in such Pool. All such Pools have been finally
\ncertified or, if required, recertified in<\/p>\n

– 27 –<\/p>\n

\n

accordance with all applicable laws, rules and regulations, except where the
\ntime for certification or recertification has not yet expired. To the Knowledge
\nof the Company, no Pools have been improperly certified, and no Loan has been
\nbought out of a Pool without all required approvals of the applicable investors.\n<\/p>\n

(w) Mortgage Banking Business<\/u>.<\/p>\n

(i) Since December 31, 2008, each of the Company and each of its Subsidiaries
\nhas complied with, and all documentation in connection with the origination,
\nprocessing, underwriting and credit approval of any mortgage loan originated by
\nthe Company or any of its Subsidiaries satisfied, in all material respects: (1)
\nall applicable Laws with respect to the origination, insuring, purchase, sale,
\npooling, servicing, subservicing, loan modification, loss mitigation or filing
\nof claims in connection with such mortgage loans, including, to the extent
\napplicable, all Laws relating to real estate settlement procedures, consumer
\ncredit protection, truth in lending Laws, usury limitations, fair housing,
\ntransfers of servicing, collection practices, equal credit opportunity and
\nadjustable rate mortgages, in each case applicable as of the time of such
\norigination, processing, underwriting or credit approval; (2) the
\nresponsibilities and obligations relating to such mortgage loans set forth in
\nany Contract between the Company or any of its Subsidiaries and any Agency, loan
\ninvestor or insurer; (3) the applicable rules, regulations, guidelines,
\nhandbooks and other requirements of any Agency, loan investor or insurer, in
\neach case applicable as of the time of such origination, processing,
\nunderwriting or credit approval; and (4) the terms and provisions of any
\nmortgage or other collateral documents and other loan documents with respect to
\neach such mortgage loan, in each case applicable as of the time of such
\norigination, processing, underwriting or credit approval.<\/p>\n

(ii) Each of the Company and each of its Subsidiaries, as applicable, is
\napproved by and is in good standing as a seller\/servicer by the Federal National
\nMortgage Association to originate and service conventional residential mortgage
\nloans.<\/p>\n

(iii) Since December 31, 2008, no Agency, loan investor or insurer has
\nindicated in writing to the Company or any of its Subsidiaries that it has
\nterminated or intends to terminate its relationship with the Company or any of
\nits Subsidiaries for poor performance, poor loan quality or concern with respect
\nto the Company153s or any of its Subsidiaries153 compliance with laws.<\/p>\n

(iv) Since December 31, 2008, the Company and its Subsidiaries have not
\nengaged in, and, to the Knowledge of the Company, no third-party vendors
\n(including outside law firms and other third-party foreclosure services
\nproviders, collectively, the “Mortgage Vendors<\/u>“) used by the Company or
\nby any of its Subsidiaries has engaged in, directly or indirectly, (1) any
\nforeclosures in violation of any applicable Law, including but not limited to
\nthe Servicemembers Civil Relief Act, or in breach of any binding Contract or (2)
\nthe conduct referred to as “robo-signing” or any other similar conduct of
\napproving or notarizing documents relating to mortgage loans that do not comply
\nwith any applicable Law.<\/p>\n

– 28 –<\/p>\n

\n

(v) Each of the Company and each of its Subsidiaries, and, to the Knowledge
\nof the Company, the Mortgage Vendors, is and has been in compliance in all
\nrespects with the standards of conduct set forth in the several Consent Orders,
\ndated April 13, 2011, issued by the OCC in connection with its interagency
\nhorizontal review of major residential mortgage services as set forth in Section
\n3.02(w)(v) of the Company Disclosure Schedule.<\/p>\n

(x) Insurance<\/u>. Each of the Company and each of its Subsidiaries
\nmaintains, and has maintained for the two (2) years prior to the date of this
\nAgreement, insurance underwritten by insurers of recognized financial
\nresponsibility, of the types and in the amounts that the Company and its
\nSubsidiaries reasonably believe are adequate for their respective businesses,
\nincluding insurance covering all real and personal property owned or leased by
\nthe Company or any of its Subsidiaries against theft, damage, destruction, acts
\nof vandalism and all other risks customarily insured against, with such
\ndeductibles as are customary for companies in the same or similar business.
\nTrue, correct and complete copies of all policies and binders of insurance
\ncurrently maintained in respect of the assets, properties, business, operations,
\nemployees, officers or directors of the Company and its Subsidiaries, excluding
\nsuch policies pursuant to which the Company, any of its Subsidiaries or an
\nAffiliate of any of them acts as the insurer and which are identified with
\nrespective expiration dates on Section 3.02(x) of the Company Disclosure
\nSchedule (collectively, the “Company Insurance Policies<\/u>“), and all
\nwritten correspondence relating to any material claims made since December 31,
\n2009 under the Company Insurance Policies, have been previously made available
\nto Purchaser. All of the Company Insurance Policies are in full force and
\neffect, the premiums due and payable thereon have been or will be timely paid
\nthrough the Closing Date, and there is no breach or default (and no condition
\nexists or event has occurred which, with the giving of notice or lapse of time
\nor both, would constitute such a breach or default) by the Company or any of its
\nSubsidiaries under any of the Company Insurance Policies or, to the Knowledge of
\nthe Company, by any other party to the Company Insurance Policies, except for
\nany such breach or default that would not reasonably be expected to have,
\nindividually or in the aggregate, a material impact on the Company and its
\nSubsidiaries, taken as a whole. Neither the Company nor any of its Subsidiaries
\nhas received any written notice of cancellation or non-renewal of any Company
\nInsurance Policy nor, to the Knowledge of the Company, is the termination of any
\nsuch policies threatened.<\/p>\n

(y) Intellectual Property<\/u>. The Company and its Subsidiaries own or
\notherwise have the right to use all (i) United States and foreign patents,
\npatent applications and statutory invention registrations, including reissues,
\ndivisions, continuations, continuations-in-part, extensions and reexaminations
\nthereof; (ii) copyrightable works, the copyrights therein and thereto (including
\ncopyrights in software and databases), and all applications therefor, and all
\nrenewals, extensions, restorations and reversions thereof; (iii) know-how, trade
\nsecrets, inventions, discoveries and other unpatented or unpatentable
\nproprietary or confidential information, including systems, methods or
\nprocedures (collectively, “Trade Secrets<\/u>“); and (iv) trademarks, service
\nmarks, trade names, trade dress, logos, corporate names, domain names and
\nsymbols, slogans and other indicia of source or origin, including the goodwill
\nof the business symbolized thereby or associated therewith (collectively,
\n“Proprietary Rights<\/u>“) used in or necessary for the conduct of the
\nbusiness of the Company and its Subsidiaries as now conducted or as would
\nreasonably be expected to be conducted in the future consistent with general
\nbanking<\/p>\n

– 29 –<\/p>\n

\n

business in the United States. Section 3.02(y) of the Company Disclosure
\nSchedule sets forth a true and complete list of all registered and applied-for
\nProprietary Rights that are owned or purported to be owned by the Company or any
\nof its Subsidiaries as of the date hereof (together with all other Proprietary
\nRights owned by or purported to be owned by the Company or any of its
\nSubsidiaries, the “Company Proprietary Rights<\/u>“). One of the Company or
\none of its Subsidiaries exclusively owns each of the Company Proprietary Rights,
\nfree and clear of all Encumbrances. The Company Proprietary Rights are valid,
\nsubsisting and enforceable. Neither the Company nor any of its Subsidiaries is
\ninfringing, misappropriating or otherwise violating the rights of any Person in
\nany Proprietary Rights, nor has the Company or any of its Subsidiaries since
\nDecember 31, 2005 infringed, misappropriated or otherwise violated the rights of
\nany Person in any Proprietary Rights other than in a de minimis<\/em>
\nrespect and, to the Knowledge of the Company, no Person is infringing,
\nmisappropriating or violating, nor has any Person infringed, misappropriated or
\nviolated since December 31, 2005 any of the Company Proprietary Rights. Except
\nas Previously Disclosed, since December 31, 2005, no charges, claims,
\nproceedings or litigation have been asserted or, to the Knowledge of the
\nCompany, threatened against the Company or any of its Subsidiaries contesting
\nthe ownership, enforceability, or validity of any of the Company Proprietary
\nRights or challenging or questioning the right of the Company and its
\nSubsidiaries to use the Proprietary Rights of any Person, and, to the Knowledge
\nof the Company, no valid basis exists for the assertion of any such charge,
\nclaim, proceeding or litigation. All licenses and other Contracts to which the
\nCompany or any of its Subsidiaries is a party relating to Proprietary Rights are
\nin full force and effect and constitute valid, binding and enforceable
\nobligations of the Company or such Subsidiary, subject to the Bankruptcy and
\nEquity Exception, as the case may be, and there have not been and there
\ncurrently are not any defaults (or any event which, with notice or lapse of
\ntime, or both, would constitute a default) by the Company or any of its
\nSubsidiaries under any license or other Contract affecting Proprietary Rights
\nused in or necessary for the conduct of the business of the Company or any of
\nits Subsidiaries as now conducted or as would reasonably be expected to be
\nconducted in the future consistent with general banking business in the United
\nStates. The validity, continuation and effectiveness of all licenses and other
\nContracts relating to the Proprietary Rights used in or necessary for the
\nconduct of the business of the Company and its Subsidiaries as now conducted or
\nas would reasonably be expected to be conducted in the future consistent with
\ngeneral banking business in the United States, the current terms thereof, and
\nthe rights of the Company or any of its Subsidiaries in and to the Company
\nProprietary Rights will not be adversely affected by the consummation of the
\ntransactions contemplated by this Agreement. The Company and its Subsidiaries
\nhave taken commercially reasonable measures to protect the Proprietary Rights
\nused in their businesses, including the confidentiality and value of all Trade
\nSecrets that are owned, used or held by the Company and its Subsidiaries,
\nincluding by maintaining policies that require employees, licensees, consultants
\nor other third parties with access to such Trade Secrets to keep such Trade
\nSecrets confidential (“Confidentiality Policies<\/u>“). To the Knowledge of
\nthe Company, such Confidentiality Policies have not been violated by any
\nemployees, licensees, consultants or other third parties who have been granted
\naccess to such Trade Secrets. The computers, computer software, firmware,
\nmiddleware, servers, workstations, routers, hubs, switches, network equipment,
\ndata communication lines and all other computerized or information technology
\nequipment (collectively, the “IT Assets<\/u>“) of the Company and its
\nSubsidiaries operate and perform in all material respects in accordance with
\ntheir documentation and functional specifications and<\/p>\n

– 30 –<\/p>\n

\n

otherwise as required by the Company and its Subsidiaries in connection with
\ntheir business, and have not materially malfunctioned or failed within the past
\nthree (3) years. To the Knowledge of the Company, since December 31, 2008, no
\nPerson has gained unauthorized access to the IT Assets. The Company and its
\nSubsidiaries have implemented and have verifiable functionality of reasonable
\nidentity management, backup, archive, security and disaster recovery technology
\nand processes consistent with industry practices. The Company and its
\nSubsidiaries have taken commercially reasonable measures, directly or
\nindirectly, to ensure the confidentiality, privacy and security of confidential
\nemployee, customer financial and other information, and are compliant with all
\napplicable Law with respect to data protection and privacy.<\/p>\n

(z) Anti-takeover Provisions Not Applicable<\/u>. The Company has taken all
\naction required to be taken by it in order to exempt this Agreement and the
\ntransactions contemplated hereby from, and this Agreement and the transactions
\ncontemplated hereby are exempt from, any anti-takeover or similar provisions of
\nthe certificate of incorporation of the Company and its bylaws and the
\nrequirements of any “moratorium,” “control share,” “fair price,” “affiliate
\ntransaction,” “business combination” or other antitakeover Laws and regulations
\nof any jurisdiction (collectively, “Takeover Laws<\/u>“), including Section
\n203 of the DGCL. The Company has taken all action required to be taken by it in
\norder to make this Agreement, the Merger and the other transactions contemplated
\nhereby and thereby comply with, and this Agreement, the Merger and the other
\ntransactions contemplated hereby do comply with, the requirements of any
\nprovisions of its certificate of incorporation or bylaws concerning “business
\ncombination,” “fair price,” “voting requirement,” “constituency requirement” or
\nother related provisions. The Company is not subject to Section 203 of the DGCL.\n<\/p>\n

(aa) Knowledge as to Conditions<\/u>. As of the date of this Agreement,
\nneither the Company nor any of its Subsidiaries knows of any reason relating to
\nthe Company or its Subsidiaries why any Requisite Regulatory Consent and, to the
\nextent necessary, any other approvals, authorizations, filings, registrations
\nand notices required for the consummation of the Merger, the Bank Merger and the
\ntransactions contemplated by this Agreement will not be obtained or that any
\nRequisite Regulatory Consent will not be granted reasonably promptly and without
\nthe imposition of a Burdensome Condition, provided<\/em>, however<\/em>,
\nthat the Company does not make any representation or warranty with respect to
\nthe management, capital, ownership structure, regulatory status or any other
\naspect of Purchaser or any of its Affiliates.<\/p>\n

(bb) Brokers and Finders<\/u>. Except that the Company has employed Sandler
\nO153Neill + Partners, L.P. as its financial advisor, none of the Company, any of
\nits Subsidiaries or any of their respective officers, directors, employees or
\nagents has employed any broker or finder or incurred any liability for any
\nfinancial advisory fees, brokerage fees, commissions or finder153s fees, and no
\nbroker or finder has acted directly or indirectly for the Company or any of its
\nSubsidiaries, in connection with this Agreement or the transactions contemplated
\nhereby.<\/p>\n

(cc) Related Party Transactions<\/u>.<\/p>\n

(i) Except as set forth in Section 3.02(cc) of the Company Disclosure
\nSchedule or as part of the normal and customary terms of an individual153s
\nemployment or service as a director, neither the Company nor any of its
\nSubsidiaries is party to any extension of credit (as debtor, creditor, guarantor
\nor otherwise), Contract for goods or<\/p>\n

– 31 –<\/p>\n

\n

services, lease or other Contract with any (A) Affiliate, (B) insider or
\nrelated interest of an insider, (C) stockholder owning five percent (5%) or more
\nof the outstanding Common Stock or related interest of such a stockholder or (D)
\nemployee who is not an executive officer (other than credit and consumer banking
\ntransactions in the ordinary course of business) (each, a “Related Party
\nContract<\/u>“). For purposes of the preceding sentence, the terms “insider,”
\n“related interest,” and “executive officer” shall have the meanings assigned in
\nthe Federal Reserve153s Regulation O.<\/p>\n

(ii) Each of the Company, Bank and each of the Company153s other Subsidiaries
\nis in compliance with, and has since December 31, 2006, complied with, Sections
\n23A and 23B of the Federal Reserve Act, its implementing regulations, and the
\nFederal Reserve153s Regulation O.<\/p>\n

(dd) Customer Relationships<\/u>.<\/p>\n

(i) Each trust or wealth management customer of the Company or any of its
\nSubsidiaries has been in all material respects originated and serviced (1) in
\nconformity with the applicable policies of the Company and its Subsidiaries, (2)
\nin accordance with the terms of any applicable Contract governing the
\nrelationship with such customer, (3) in accordance with any instructions
\nreceived from such customers and their authorized representatives and authorized
\nsigners, (4) consistent with each customer153s risk profile; and (5) in compliance
\nwith all applicable Laws and the Company153s and its Subsidiaries153 constituent
\ndocuments, including any policies and procedures adopted thereunder. Each
\nContract governing a relationship with a trust or wealth management customer of
\nthe Company or any of its Subsidiaries has been duly and validly executed and
\ndelivered by the Company and each Subsidiary and, to the Knowledge of the
\nCompany, the other contracting parties, each such Contract constitutes a valid
\nand binding obligation of the parties thereto, except as such enforceability may
\nbe limited by the Bankruptcy and Equity Exception, and the Company and its
\nSubsidiaries and the other parties thereto have duly performed in all material
\nrespects their obligations thereunder and the Company and its Subsidiaries and,
\nto the Knowledge of the Company, such other person is in compliance with each of
\nthe terms thereof.<\/p>\n

(ii) Neither the Company nor any of its Subsidiaries is a registered
\nbroker-dealer under the Exchange Act or is required to be so registered.<\/p>\n

(iii) No Contract governing a relationship with a trust or wealth management
\ncustomer of the Company or any of its Subsidiaries provides for any material
\nreduction of fees charged (or in other compensation payable to the Company or
\nany of its Subsidiaries thereunder) by reason of this Agreement.<\/p>\n

(iv) (1) None of the Company, any of its Subsidiaries or any of their
\nrespective directors, officers or employees is the beneficial owner of any
\ninterest in any of the accounts maintained on behalf of any trust or wealth
\nmanagement customer of the Company or any of its Subsidiaries and (2) none of
\nthe directors, officers and employees of the Company or any of its Subsidiaries
\nis a party to any Contract pursuant to which it is obligated to provide service
\nto, or receive compensation or benefits from, any of the trust or wealth
\nmanagement customers of the Company or any of its Subsidiaries after the Closing
\nDate.<\/p>\n

– 32 –<\/p>\n

\n

(v) Each account opening document, margin account agreement, investment
\nadvisory agreement and customer disclosure statement with respect to any trust
\nor wealth management customer of the Company or any of its Subsidiaries conforms
\nin all material respects to the forms provided to Purchaser prior to the Closing
\nDate.<\/p>\n

(vi) All other books and records primarily related to the trust and wealth
\nmanagement businesses of each of the Company and each of its Subsidiaries
\ninclude documented risk profiles signed by each such customer.<\/p>\n

(ee) Investment Adviser Subsidiaries; Clients<\/u>. Each of the Company153s
\nSubsidiaries that provides investment management, investment advisory or
\nsub-advisory services (including management and advice provided to separate
\naccounts and participation in wrap fee programs) (an “Advisory Entity<\/u>“)
\n(1) has operated since December 31, 2005 and is currently operating in
\ncompliance with all Laws applicable to it or its business and (2) has all
\nregistrations, permits, licenses, exemptions, orders and approvals required for
\nthe operation of its business or ownership of its properties and assets
\nsubstantially as currently conducted. There is no action, suit or proceeding
\npending or, to the Knowledge of the Company, threatened, and there is no
\ninvestigation pending or, to the Knowledge of the Company, threatened, that
\nwould reasonably be expected to lead to the revocation, amendment, failure to
\nrenew, limitation, suspension or restriction of any such registrations, permits,
\nlicenses, exemptions, orders and approvals.<\/p>\n

(i) Each Advisory Entity has been since December 31, 2005 and is in all
\nmaterial respects in compliance with each Contract for services provided in its
\ncapacity as an Advisory Entity (an “Advisory Contract<\/u>“) to which it is a
\nparty.<\/p>\n

(ii) Each of the Advisory Entity accounts subject to ERISA of (1) the party
\nto an Advisory Contract other than the applicable Advisory Entity or (2) any
\nother advisory client of an Advisory Entity for purposes of the Investment
\nAdvisers Act of 1940 (the “Investment Advisers Act<\/u>“) (each of (1) and
\n(2), an “Advisory Client<\/u>“) has been managed by the applicable Advisory
\nEntity in all material respects in compliance with the applicable requirements
\nof ERISA.<\/p>\n

(iii) None of the Advisory Entities nor any “person associated with an
\ninvestment adviser” (as defined in the Investment Advisers Act) of any of them
\nis ineligible pursuant to Section 203 of the Investment Advisers Act to serve as
\nan investment adviser or as a person associated with a registered investment
\nadviser. There is no proceeding pending or, to the Knowledge of the Company,
\nthreatened that would reasonably be expected to result in any such
\nineligibility.<\/p>\n

(iv) The Company has made available to Purchaser true and complete copies of
\neach Uniform Application for Investment Adviser Registration on Form ADV filed
\nsince December 31, 2005 by each Advisory Entity, reflecting all amendments
\nthereto filed with the SEC to the date hereof (each, a “Form ADV<\/u>“). The
\nForms ADV are in compliance in all material respects with the applicable
\nrequirements of the<\/p>\n

– 33 –<\/p>\n

\n

Investment Advisers Act and do not contain any untrue statement of a material
\nfact or omit to state a material fact required to be stated therein or necessary
\nto make the statements therein, in light of the circumstances under which they
\nwere made, not misleading at the time such statements were made. Since December
\n31, 2005, each Advisory Entity has made available to each Advisory Client its
\nForm ADV to the extent required by the Investment Advisers Act.<\/p>\n

(v) Customer complaints that have been made since December 31, 2005 against
\nany Advisory Entity, or any of its registered representatives, are set forth in
\nSection 3.02(ee)(v) of the Company Disclosure Schedule and copies of each such
\ncomplaint have been furnished or made available to Purchaser. Customer
\ncomplaints that are pending as of the date of this Agreement are appropriately
\nnoted in Section 3.02(ee)(v) of the Company Disclosure Schedule. The balance
\nsheet of the Company included in the Financial Statements contains adequate
\naccruals to the extent required by GAAP for the costs (including costs of
\nsettlement, judgments and attorneys153 fees and expenses) to be incurred by the
\nCompany in connection with all such customer complaints pending as of such date.
\nSubject to applicable Laws, the Company shall reasonably promptly notify
\nPurchaser of any customer complaints against any Advisory Entity or any of its
\nregistered representatives received following the date of this Agreement and
\nprovide copies of each such complaint and all correspondence related thereto to
\nPurchaser.<\/p>\n

(vi) The Company has made available to Purchaser true and complete copies of
\nall deficiency letters and inspection reports or similar documents furnished to
\nany Advisory Entity by the SEC since December 31, 2005 and such Advisory
\nEntity153s responses thereto, if any.<\/p>\n

ARTICLE IV <\/strong><\/p>\n

REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER
\nSUB <\/strong><\/p>\n

Section 4.01<\/u> Representations and Warranties of Purchaser and Merger
\nSub<\/u>. Purchaser and Merger Sub hereby represent and warrant to the Company,
\nthat, except as Previously Disclosed:<\/p>\n

(a) Organization, Good Standing and Qualification<\/u>. Each of Purchaser
\nand Merger Sub is duly organized, validly existing and in good standing under
\nthe laws of the jurisdiction of its organization, is duly qualified to do
\nbusiness and is in good standing in all jurisdictions where its ownership or
\nleasing of property or the conduct of its business requires it to be so
\nqualified, and each of Purchaser and Merger Sub has the power and authority and
\ngovernmental authorizations to own its properties and assets and to carry on its
\nbusiness in all material respects as it is now being conducted.<\/p>\n

(b) Authorization<\/u>.<\/p>\n

(i) No vote of holders of capital stock of Purchaser is necessary to approve
\nthis Agreement and the Merger and the other transactions contemplated hereby,\n<\/p>\n

– 34 –<\/p>\n

\n

including under any applicable Law or the requirements of any SRO or stock
\nexchange. Each of Purchaser and Merger Sub has all requisite corporate power and
\nauthority and has taken all corporate action necessary in order to execute,
\ndeliver and perform its obligations under this Agreement, and to consummate the
\nMerger and the other transactions contemplated hereby except for the approval of
\nthis Agreement by Purchaser as the sole stockholder of Merger Sub (which
\napproval of Purchaser shall occur, and shall be effective, no later than 11:59
\np.m. (Pacific Time) on the date hereof). This Agreement has been duly executed
\nand delivered by each of Purchaser and Merger Sub and, assuming due
\nauthorization, execution and delivery by the Company, is a valid and binding
\nagreement of Purchaser and Merger Sub, enforceable against each of Purchaser and
\nMerger Sub in accordance with its terms, subject to the Bankruptcy and Equity
\nException. No other corporate proceedings, other than the approval by Purchaser
\nas the sole stockholder of Merger Sub, are necessary for the execution and
\ndelivery by each of Purchaser and Merger Sub of this Agreement, the performance
\nby them of their respective obligations hereunder or the consummation by them of
\nthe transactions contemplated hereby.<\/p>\n

(ii) Neither the execution, delivery and performance by Purchaser and Merger
\nSub of this Agreement, nor the consummation of the transactions contemplated
\nhereby, nor compliance by Purchaser and Merger Sub with any of the provisions
\nhereof, will (1) violate, conflict with, or result in a breach of any provision
\nof, or constitute a default (or an event which, with notice or lapse of time or
\nboth, would constitute a default) under, or result in the termination of, or
\naccelerate the performance required by, or result in a right of termination or
\nacceleration of, or result in the creation of any Encumbrance upon any of the
\nproperties or assets of Purchaser or any of its Subsidiaries under any of the
\nterms, conditions or provisions of (x) the certificate of incorporation and
\nbylaws (or similar governing documents) of Purchaser or any of its Subsidiaries
\nor (y) any material Contract to which Purchaser or any of its Subsidiaries is a
\nparty or by which it may be bound, or to which Purchaser or any of its
\nSubsidiaries or any of the properties or assets of Purchaser or any of its
\nSubsidiaries may be subject, or (2) subject to compliance with the statutes and
\nregulations referred to in Section 4.01(b)(iii), violate any Law or Order
\napplicable to Purchaser or any of its Subsidiaries or any of their respective
\nproperties or assets, except in the case of clauses (1)(y) and (2) as would not
\nreasonably be expected to have, individually or in the aggregate, a Purchaser
\nMaterial Adverse Effect.<\/p>\n

(iii) Other than (w) as may be required by the securities or “blue sky” laws
\nof the various states, (x) an approval application to and a notification filing
\nwith the Japan Financial Services Agency (the “JFSA<\/u>“) by Purchaser and
\nits Affiliates and of JFSA approval (the “JFSA Approval<\/u>“), (y) the filing
\nof the Delaware Certificate of Merger or (z) the Regulatory Consents, no notice
\nto, registration, declaration or filing with, exemption or review by, or
\nauthorization, order, consent or approval of, any Governmental Entity, or
\nexpiration or termination of any statutory waiting period, is necessary in
\nconnection with Purchaser153s and Merger Sub153s execution, delivery or performance
\nof this Agreement, and the consummation of the Merger, the Bank Merger and the
\nother transactions contemplated hereby. A list of all Regulatory Consents that,
\nto the knowledge of Purchaser, are required by Purchaser, Merger Sub or any of
\ntheir Affiliates as of the date hereof is disclosed in Section 4.01(b)(iii) of
\nthe Purchaser Disclosure Schedule.<\/p>\n

– 35 –<\/p>\n

\n

(c) Brokers and Finders<\/u>. Except that Purchaser has employed Morgan
\nStanley & Co., LLC as its financial advisor, none of Purchaser, its
\nAffiliates or any of their respective officers, directors, employees or agents
\nhas employed any broker or finder or incurred any liability for any financial
\nadvisory fees, brokerage fees, commissions or finder153s fees, and no broker or
\nfinder has acted directly or indirectly for Purchaser, in connection with this
\nAgreement or the transactions contemplated hereby.<\/p>\n

(d) Knowledge as to Conditions<\/u>. As of the date of this Agreement,
\nPurchaser knows of no reason relating to Purchaser or its Subsidiaries why any
\nRequisite Regulatory Consent or the JFSA Approval or and, to the extent
\nnecessary, any other approvals, authorizations, filings, registrations and
\nnotices required for the consummation of the Merger, the Bank Merger and the
\ntransactions contemplated by this Agreement will not be obtained or that any
\nRequisite Regulatory Consent or the JFSA Approval will not be granted reasonably
\npromptly and without the imposition of a Burdensome Condition;
\nprovided<\/em>, however<\/em>, that Purchaser does not make any
\nrepresentation or warranty with respect to the management, capital, ownership
\nstructure, regulatory status or any other aspect of the Company or any of its
\nSubsidiaries or Affiliates.<\/p>\n

(e) Available Funds<\/u>. As of the Closing, Purchaser will have
\nimmediately available to it all funds necessary for the payment to the Paying
\nAgent of the Exchange Fund and to satisfy all of the other obligations of
\nPurchaser and Merger Sub under this Agreement.<\/p>\n

(f) Compliance with Laws<\/u>. The business of Purchaser153s ultimate parent
\ncompany and each of such parent company153s Subsidiaries, including Purchaser and
\nMerger Sub, has not been since December 31, 2009, and is not being, conducted in
\nviolation of any applicable Law, except for violations that, individually or in
\nthe aggregate, would not reasonably be expected to have a Purchaser Material
\nAdverse Effect. Except as would not, individually or in the aggregate,
\nreasonably be expected to have a Purchaser Material Adverse Effect, (i) such
\nparent company and each of its Subsidiaries, including Purchaser and Merger Sub,
\nhas all permits, licenses, franchises, authorizations, orders and approvals of,
\nand have made all filings, applications and registrations with, Governmental
\nEntities and SROs that are required in order to permit them to own or lease
\ntheir properties and assets and to carry on their business as presently
\nconducted, (ii) each of such parent company and each of its Subsidiaries,
\nincluding Purchaser and Merger Sub, has since December 31, 2009 complied in all
\nrespects with and is not in default or violation in any respect of, and none of
\nthem is, to the knowledge of Purchaser, under investigation with respect to, or,
\nto the knowledge of Purchaser, has been threatened to be charged with or given
\nnotice of, any violation of, any applicable Law or Order of any Governmental
\nEntity or SRO and (iii) other than statutory or regulatory restrictions of
\ngeneral application, no Governmental Entity or SRO has placed any restriction on
\nthe business or properties of such parent company or any of its Subsidiaries,
\nincluding Purchaser and Merger Sub, that remains in effect as of the date
\nhereof.<\/p>\n

(g) Agreements with Regulatory Agencies<\/u>. Except as set forth in
\nSection 4.01(g) of the Purchaser Disclosure Schedule, as of the date hereof,
\nneither Purchaser153s ultimate<\/p>\n

– 36 –<\/p>\n

\n

parent company nor any of such parent company153s Subsidiaries, including
\nPurchaser and Merger Sub, is subject to any Regulatory Agreement, nor has
\nPurchaser153s ultimate parent company nor any of such parent company153s
\nSubsidiaries, including Purchaser and Merger Sub, been advised in writing since
\nDecember 31, 2009 by any Governmental Entity or SRO that it is considering
\nissuing, initiating, ordering, or requesting any such Regulatory Agreement,
\nexcept, in each case, as would not, individually or in the aggregate, reasonably
\nbe expected to have a Purchaser Material Adverse Effect. Purchaser153s ultimate
\nparent company and each of such parent company153s Subsidiaries, including
\nPurchaser and Merger Sub, are in compliance in all material respects with each
\nRegulatory Agreement to which each is a party or subject, and since December 31,
\n2010 neither Purchaser153s ultimate parent company nor any of such parent
\ncompany153s Subsidiaries, including Purchaser and Merger Sub, has received any
\nwritten notice from any Governmental Entity or SRO indicating that either
\nPurchaser153s ultimate parent company or any of such parent company153s
\nSubsidiaries, including Purchaser and Merger Sub, is not in compliance in all
\nmaterial respects with any such Regulatory Agreement, except, in each case, as
\nwould not, individually or in the aggregate, reasonably be expected to have a
\nPurchaser Material Adverse Effect.<\/p>\n

(h) No Prior Activities<\/u>. Except in connection with its incorporation
\nor organization or the negotiation and consummation of this Agreement and the
\ntransactions contemplated hereby, Merger Sub has not incurred any obligations or
\nliabilities, and has not engaged in any business or activities of any type or
\nkind whatsoever or entered into any agreements or arrangements with any Person.\n<\/p>\n

(i) Litigation<\/u>. There are no pending or, to the knowledge of
\nPurchaser, threatened, legal, administrative, arbitral or other proceedings,
\nclaims, actions, or, to the knowledge of Purchaser, pending or threatened
\ngovernmental or regulatory investigations of any nature (1) against Purchaser153s
\nultimate parent company or any of such parent company153s Subsidiaries, including
\nPurchaser and Merger Sub, (excluding those of the type contemplated by the
\nfollowing clause (2)) except as would not, individually or in the aggregate,
\nreasonably be expected to have a Purchaser Material Adverse Effect, or (2)
\nchallenging the validity or propriety of the transactions contemplated by this
\nAgreement. There is no material injunction, order, judgment, decree or
\nregulatory restriction imposed upon such parent company or any of its
\nSubsidiaries, including Purchaser and Merger Sub, or any of their respective
\nassets, except as would not, individually or in the aggregate, reasonably be
\nexpected to have a Purchaser Material Adverse Effect.<\/p>\n

ARTICLE V <\/strong><\/p>\n

COVENANTS RELATING TO CONDUCT OF BUSINESS <\/strong>\n<\/p>\n

Section 5.01<\/u> Conduct of Businesses Prior to the Effective
\nTime<\/u>. Except as Previously Disclosed, as expressly permitted by this
\nAgreement, as required by applicable Law, or with the prior written consent of
\nPurchaser, during the period from the date of this Agreement to the Effective
\nTime, the Company shall, and shall cause each of its Subsidiaries to, (a)
\nconduct its business in the ordinary course of business, consistent with past
\npractice, (b) use reasonable best efforts to maintain and preserve its business
\norganizations intact and maintain existing relations and goodwill with
\nGovernmental Entities, customers, suppliers, distributors, creditors,<\/p>\n

– 37 –<\/p>\n

\n

lessors, landlord, Employees and business associates, to keep available the
\nservices of its and its Subsidiaries153 Employees and to maintain its branch
\nnetwork and (c) not take any action that would reasonably be expected to
\nmaterially delay or delay beyond the Outside Date the obtainment by any of the
\nCompany, Purchaser or Merger Sub of any necessary approvals of any Governmental
\nEntity or SRO required for the transactions contemplated hereby or to perform
\nits covenants and agreements under this Agreement or to consummate the
\ntransactions contemplated hereby. Except as required by applicable Law or with
\nthe prior written consent of the Company, during the period from the date of
\nthis Agreement to the Effective Time, Purchaser and Merger Sub shall not, and
\nshall not permit any of their Affiliates to, take any action that would
\nreasonably be expected to materially delay or delay beyond the Outside Date the
\nobtainment by any of the Company, Purchaser or Merger Sub of any necessary
\napprovals of any Governmental Entity or SRO required for the transactions
\ncontemplated hereby.<\/p>\n

Section 5.02<\/u> Company Forbearances<\/u>. During the period from the
\ndate of this Agreement to the Effective Time, except as Previously Disclosed, as
\nexpressly permitted by this Agreement or as required by applicable Law, the
\nCompany shall not, and shall not permit any of its Subsidiaries to, without the
\nprior written consent of Purchaser (which consent shall not, in the case of
\nsubsections (c), (d), (i), (j)(ii), (k), (n), (o)(ii), (p), (q), (s) and (u) (in
\nthe case of subsection (u), to the extent in respect of one of the other
\nsubsections listed in this parenthetical), be unreasonably withheld, delayed or
\nconditioned):<\/p>\n

(a) Other than pursuant to the Treasury Warrants or in connection with the
\nexercise or settlement of Company Options, Company Restricted Shares or Company
\nStock Award, in each case that are outstanding as of the date of this Agreement,
\n(i) issue, sell or otherwise permit to become outstanding, or dispose of or
\nencumber or pledge, or authorize or propose the creation of, any additional
\nshares of its stock or (ii) authorize or cause any additional shares of its
\nstock to become subject to new grants.<\/p>\n

(b) (i) Make, declare, pay or set aside for payment any dividend on or in
\nrespect of, or declare or make any distribution on any shares of its stock
\n(other than dividends from its wholly owned Subsidiaries to it or another of its
\nwholly owned Subsidiaries and dividends in respect of the outstanding trust
\npreferred securities of the Company as of the date hereof) or (ii) directly or
\nindirectly adjust, split, combine, redeem, reclassify, purchase or otherwise
\nacquire, any shares of its stock (other than repurchases in the ordinary course
\nof business to satisfy obligations under Benefit Plans).<\/p>\n

(c) Amend the terms of, waive any material rights under, fail to use
\nreasonable best efforts to enforce, terminate, knowingly violate the terms of or
\nenter into any Material Contracts.<\/p>\n

(d) Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon
\nor otherwise dispose of or discontinue any of its assets, deposits, business or
\nproperties, except for sales, transfers, mortgages, encumbrances, licenses,
\nlapses, cancellations, abandonments or other dispositions or discontinuances in
\nthe ordinary course of business.<\/p>\n

(e) Acquire (other than by way of foreclosures or acquisitions of control in
\na fiduciary or similar capacity or in satisfaction of debts previously
\ncontracted in good faith, in each case in the ordinary course of business
\nconsistent with past practice) all or any portion of the assets, business,
\ndeposits or properties of any other entity for a purchase price in excess of
\n$250,000.<\/p>\n

– 38 –<\/p>\n

\n

(f) Amend the certificate of incorporation or bylaws of the Company, or
\nsimilar governing documents of any of its Subsidiaries.<\/p>\n

(g) Implement or adopt any change in its financial or regulatory accounting
\nprinciples, practices or methods, other than as required by GAAP or applicable
\nregulatory accounting requirements.<\/p>\n

(h) Except as required by the terms of any Benefit Plan existing as of the
\ndate hereof (i) increase in any manner the compensation or benefits of any of
\nthe current or former directors, officers, employees, consultants, independent
\ncontractors or other service providers of the Company or any of its Subsidiaries
\n(collectively, “Employees<\/u>“), other than increases to Employees who are
\nnot directors or executive officers of the Company or any of its Subsidiaries
\nthat are in the ordinary course of business consistent with past practice, (ii)
\nbecome a party to, establish, amend, commence participation in, terminate or
\ncommit itself to the adoption of any stock option plan or other stock-based
\ncompensation plan, compensation, severance, pension, retirement, profit-sharing,
\nwelfare benefit, or other employee benefit plan or Contract or employment
\nagreement with or for the benefit of any Employee (or prospective Employees),
\n(iii) accelerate the vesting of or lapsing of restrictions with respect to any
\nstock-based compensation or other long-term incentive compensation, other
\ncompensation or benefits under any Benefit Plans, (iv) cause the funding of any
\nrabbi trust or similar arrangement or take any action to fund or in any other
\nway secure the payment of compensation or benefits under any Benefit Plan or (v)
\nchange any actuarial assumptions used to calculate funding obligations with
\nrespect to any Benefit Plan that is required by applicable Law to be funded or
\nchange the manner in which contributions to such plans are made or the basis on
\nwhich such contributions are determined, except as may be required by GAAP.<\/p>\n

(i) Incur or guarantee any indebtedness for borrowed money other than in the
\nordinary course of business consistent with past practice and not in excess of
\n$1,000,000.<\/p>\n

(j) (i) Enter into any new line of business or (ii) materially change its
\nlending, investment, underwriting, risk, compliance and asset\/liability
\nmanagement and other banking and operating policies, except as required by a
\nGovernmental Entity.<\/p>\n

(k) Make any material change to (i) its investment securities portfolio,
\nderivatives portfolio or its interest rate exposure, through purchases, sales or
\notherwise, or (ii) the manner in which such portfolio is classified or reported,
\nexcept as required by a Governmental Entity.<\/p>\n

(l) Settle any action, suit, claim or proceeding against it or any of its
\nSubsidiaries, except for an action, suit, claim or proceeding that is settled in
\nan amount and for consideration not in excess of $1,000,000 and that would not
\n(i) impose any restriction on it or its Subsidiaries or on Purchaser or any of
\nits Affiliates or (ii) create precedent for claims that is reasonably likely to
\nbe material to it or its Subsidiaries.<\/p>\n

– 39 –<\/p>\n

\n

(m) Make application for the opening, relocation or closing of any, or open,
\nrelocate or close any, branch office, loan production office or other
\nsignificant office or operations facility other than such applications that have
\nbeen submitted and announced as of the date of this Agreement.<\/p>\n

(n) Make or change any material Tax election, change or consent to any change
\nin its or its Subsidiaries153 material method of accounting for Tax purposes,
\nsettle or compromise any material Tax liability, claim or assessment, enter into
\nany closing agreement, waive or extend any statute of limitations with respect
\nto a material amount of Taxes, surrender any right to claim a refund for a
\nmaterial amount of Taxes, or file any material amended Tax Return, in each case
\nif such action or actions, individually or in the aggregate, would increase the
\nTax liability of the Company or any of its Subsidiaries by a material amount.\n<\/p>\n

(o) (i) Merge or consolidate the Company or any of its Subsidiaries with any
\nother Person, except for any such transactions among wholly owned Subsidiaries
\nof the Company, or restructure, reorganize or completely or partially liquidate
\nor (ii) otherwise enter into any Contracts or arrangements imposing material
\nchanges or restrictions on its assets, operations or businesses.<\/p>\n

(p) Create or incur any Encumbrance material to the Company and its
\nSubsidiaries, taken as a whole, not incurred in the ordinary and usual course of
\nbusiness consistent with past practice.<\/p>\n

(q) Acquire any Loans through bulk purchases that are not in the process as
\nof the date of this Agreement or make any Loans to any Person (other than the
\nCompany or any direct or indirect wholly owned Subsidiary of the Company and
\nother than renewals and extensions of Loans outstanding as of the date of this
\nAgreement) in excess of $10,000,000 in the aggregate.<\/p>\n

(r) Make any capital contributions to or investments (other than to be held
\nin a fiduciary or agency capacity to be beneficially owned by third Parties) in
\nany Person in excess of $100,000 (other than to or in any direct or indirect
\nwholly owned Subsidiary of the Company).<\/p>\n

(s) Except as set forth in the capital budgets set forth in Section 5.02(s)
\nof the Company Disclosure Schedule and consistent therewith, make or authorize
\nany capital expenditure in excess of $100,000 per project during any twelve (12)
\nmonth period.<\/p>\n

(t) Take any action that would reasonably be expected to result in any of the
\nconditions to the Merger set forth in Article VII not being satisfied.<\/p>\n

(u) Agree to take, make any commitment to take, or adopt any resolutions of
\nthe Company Board in support of, any of the actions prohibited by this Section
\n5.02.<\/p>\n

– 40 –<\/p>\n

\n

ARTICLE VI <\/strong><\/p>\n

ADDITIONAL AGREEMENTS <\/strong><\/p>\n

Section 6.01<\/u> Cooperation; Regulatory Matters<\/u>.<\/p>\n

(a) Each of the Parties shall cooperate with each other Party and use its
\nreasonable best efforts to take or cause to be taken all actions, and do or
\ncause to be done all things, reasonably necessary, proper or advisable on its
\npart under this Agreement and applicable Law to consummate the Merger, the Bank
\nMerger and other transactions contemplated by this Agreement as soon as
\npractical, including promptly preparing and filing (or causing any required
\nAffiliate to promptly prepare and file) all necessary documentation (the
\n“Required Filings<\/u>“) to effect all applications, notices, petitions and
\nfilings, to obtain as promptly as practicable all permits, consents, approvals
\nand authorizations (including Regulatory Consents and the JFSA Approval) of all
\nthird parties, SROs and Governmental Entities that are necessary or advisable to
\nconsummate the transactions contemplated by this Agreement (including the Merger
\nand the Bank Merger), and to comply with the terms and conditions of all such
\nRegulatory Consents and the JFSA Approval, permits, consents, approvals and
\nauthorizations of all such third parties, SROs or Governmental Entities. Without
\nlimiting the generality of the foregoing, the Parties agree that all Required
\nFilings with respect to any Requisite Regulatory Consent and the JFSA Approval
\nshall be completed and filed no later than thirty (30) days after the date of
\nthis Agreement. The Company and Purchaser shall have the right to review in
\nadvance, and, to the extent practicable, each will consult the other on, in each
\ncase subject to applicable Laws, all the information relating to the Company or
\nPurchaser, as the case may be, or any of their respective Affiliates, that
\nappear in any Required Filings. In exercising the foregoing rights set forth in
\nthis Section 6.01(a), each of the Parties shall act reasonably and as promptly
\nas practicable. The Parties shall consult with each other with respect to the
\nobtaining of all permits, consents, approvals and authorizations of all third
\nparties, SROs and Governmental Entities necessary or advisable to consummate the
\ntransactions contemplated by this Agreement and each Party will keep the other
\napprised on a current basis of the status of matters, and any material
\ncommunication to, with or from a Governmental Entity, relating to, or reasonably
\nlikely to affect the timely completion of, the transactions contemplated by this
\nAgreement.<\/p>\n

(b) Each of Purchaser and the Company shall, upon request, furnish to the
\nother all information concerning itself, its Affiliates, Subsidiaries,
\ndirectors, officers and stockholders and such other matters as may be reasonably
\nnecessary or advisable in connection with the Proxy Statement or Information
\nStatement, as applicable, or any other statement, filing, notice or application
\nmade by or on behalf of Purchaser or any of its Affiliates, or the Company or
\nany of its Subsidiaries, to any SRO or Governmental Entity in connection with
\nthe Merger, the Bank Merger or any of the other transactions contemplated by
\nthis Agreement.<\/p>\n

(c) In furtherance and not in limitation of the foregoing, each of Purchaser
\n(and Purchaser shall cause its Subsidiaries to) and the Company (and the Company
\nshall cause its Subsidiaries to) shall use its reasonable best efforts to (i)
\navoid the entry of, or to have vacated, lifted, reversed or overturned any
\ndecree, judgment, injunction or other order, whether temporary, preliminary or
\npermanent, that would restrain, prevent or delay the Closing, and (ii) avoid or
\neliminate each and every impediment under any applicable Law so as to enable the\n<\/p>\n

– 41 –<\/p>\n

\n

Closing to occur as soon as possible, including proffering to, or agreeing
\nto, and effecting, by consent decree, hold separate order, or otherwise, the
\nsale, divestiture, lease, license, transfer, disposition, encumbering or holding
\nseparate of any assets, licenses, operations, rights, product lines, businesses
\nor interest therein of Purchaser, the Company or any of their respective
\nSubsidiaries; provided<\/em>, however<\/em>, that nothing in this
\nAgreement, including this Section 6.01, shall require, or be construed to
\nrequire, Purchaser or any of its Affiliates to (x) proffer to, or agree to,
\nsell, divest, lease, license, transfer, dispose of or otherwise encumber or hold
\nseparate and agree to sell, divest, lease, license, transfer, dispose of or
\notherwise encumber before or after the Effective Time, any assets, licenses,
\noperations, rights, product lines, businesses or interest therein of Purchaser,
\nthe Company or any of their respective Affiliates (or to consent to any sale,
\ndivestiture, lease, license, transfer, disposition or other encumberment by the
\nCompany of any of its assets, licenses, operations, rights, product lines,
\nbusinesses or interest therein or to any agreement by the Company to take any of
\nthe foregoing actions), (y) agree to any conditions or make any commitments that
\nare not comparable to those imposed in connection with comparable transactions
\nin the United States and that would not be reasonably foreseeable based upon
\npublicly available information or discussions or communications prior to the
\ndate of this Agreement involving Purchaser or any of its Affiliates and
\nrepresentatives of any SRO or Government Entity, or (z) agree to any material
\nchanges (including, without limitation, through a licensing arrangement) or
\nrestriction on, or other impairment of Purchaser153s ability to own or operate,
\nany of any such assets, licenses, operations, rights, product lines, businesses
\nor interests therein or Purchaser153s or any of its Affiliates153 ability to vote,
\ntransfer, receive dividends or otherwise exercise full ownership rights with
\nrespect to the stock of the Surviving Corporation, in each case of clauses (x),
\n(y) and (z), to the extent that any such actions would have a material adverse
\neffect after the Effective Time on the Company and its Subsidiaries, taken as a
\nwhole, or on Purchaser and its Subsidiaries, taken as a whole, or on Parent153s
\nultimate parent company, in each case measured on a scale relative to the
\nCompany and its Subsidiaries, taken as a whole (a “Burdensome
\nCondition<\/u>“).<\/p>\n

(d) Each of Purchaser and the Company shall promptly advise the other upon
\nreceiving (including through their respective Affiliates) any communication from
\nany SRO or Governmental Entity the consent or approval of which is required for
\nconsummation of the transactions contemplated by this Agreement that causes such
\nParty to believe that there is a reasonable likelihood that any Requisite
\nRegulatory Consent or the JFSA Approval will not be obtained without the
\nimposition of a Burdensome Condition or that the receipt of any such approval
\nmay be delayed.<\/p>\n

(e) Purchaser agrees to execute and deliver, or cause to be executed and
\ndelivered, by or on behalf of the Surviving Company, at or prior to the
\nEffective Time, one or more supplemental indentures, guarantees, and other
\ninstruments required for the due assumption of Company153s outstanding debt,
\nguarantees, securities, and other agreements listed on Section 6.01(e) of the
\nCompany Disclosure Schedule to the extent required by the terms of such debt,
\nguarantees, securities, and other agreements.<\/p>\n

Section 6.02<\/u> Access to Information<\/u>.<\/p>\n

(a) Upon reasonable notice and subject to applicable Laws, the Company shall,
\nand shall cause each of its Subsidiaries to, afford to the officers, directors,
\nemployees,<\/p>\n

– 42 –<\/p>\n

\n

agents and the Representatives of Purchaser, reasonable access, during normal
\nbusiness hours during the period prior to the Effective Time, to all its
\nproperties, books, Contracts, commitments and records, and, during such period,
\nthe Company shall, and shall cause its Subsidiaries to, make available to
\nPurchaser (i) a copy of each report, schedule, registration statement and other
\ndocument filed or received by it during such period pursuant to the requirements
\nof federal securities Laws or federal or state banking or insurance Laws (other
\nthan reports or documents that the Company is not permitted to disclose under
\napplicable Law) and (ii) all other information concerning its business,
\nproperties and personnel as Purchaser may reasonably request. Upon the
\nreasonable request of the Company, Purchaser shall furnish such reasonable
\ninformation about it and its Affiliates as is relevant to the Company and its
\nshareholders in connection with the transactions contemplated by this Agreement.
\nNeither the Company, Purchaser nor any of their respective Affiliates shall be
\nrequired to provide access to or to disclose information where such access or
\ndisclosure would jeopardize the attorney-client privilege of such party or
\ncontravene any Law, fiduciary duty or Order or binding Contract entered into
\nprior to the date of this Agreement. The Parties shall make appropriate
\nsubstitute disclosure arrangements under circumstances in which the restrictions
\nof the preceding sentence apply.<\/p>\n

(b) All nonpublic information and materials provided prior to the date of
\nthis Agreement shall be subject to the provisions of the confidentiality
\nagreement entered into between the Parties as of January 19, 2012 (the
\n“Confidentiality Agreement<\/u>“) and all nonpublic information and materials
\nprovided on or after the date of this Agreement shall be subject to the
\nprovisions of the non-disclosure agreement entered into between the Parties as
\nof the date of this Agreement (the “Non-Disclosure Agreement<\/u>“).<\/p>\n

(c) No investigation by a party hereto or its representatives shall affect or
\nbe deemed to modify or waive any representations, warranties or covenants of the
\nother Party set forth in this Agreement.<\/p>\n

Section 6.03<\/u> Employee Matters<\/u>.<\/p>\n

(a) Following the Closing Date, Purchaser shall maintain or cause to be
\nmaintained employee benefit plans and compensation opportunities for the benefit
\nof Employees who are actively employed by the Company or its Subsidiaries on the
\nClosing Date (“Covered Employees<\/u>“) that provide employee benefits and
\ncompensation opportunities that, in the aggregate, are no less favorable than
\nthe employee benefits (other than severance benefits, which, for the avoidance
\nof doubt, are governed under Section 6.03(b)) and compensation opportunities
\nthat are generally made available to similarly situated employees of Purchaser
\nor its Subsidiaries (other than the Surviving Corporation and its Subsidiaries)
\n(collectively, the “Purchaser Plans<\/u>“), as applicable; provided<\/em>
\nthat (i) with respect to retirement benefits, satisfaction of the foregoing
\nstandard shall not require that any Covered Employee be eligible to participate
\nin any specific retirement plan of Purchaser or a closed or frozen Purchaser
\nPlan; and (ii) until such time as Purchaser shall cause Covered Employees to
\nparticipate in the Purchaser Plans, a Covered Employee153s continued participation
\nin the employee benefit plans and compensation opportunities of the Company and
\nits Subsidiaries as in effect immediately prior to the Closing Date shall be
\ndeemed to satisfy the foregoing provisions of this sentence (it being understood
\nthat participation in the Purchaser Plans may commence at different times with
\nrespect to each Purchaser Plan).<\/p>\n

– 43 –<\/p>\n

\n

(b) Purchaser shall provide severance benefits in accordance with the terms
\nand conditions of the special severance policy set forth on Section 6.03(b) of
\nthe Purchaser Disclosure Schedule (“Special Severance Policy<\/u>“) to Covered
\nEmployees who experience a qualifying termination of employment with Purchaser,
\nthe Surviving Corporation or any of their respective Subsidiaries during the
\nperiod beginning on the Closing Date and ending on the 60th<\/sup> day
\nfollowing the first anniversary of the Closing Date (the “Special Severance
\nPeriod<\/u>“). Each Covered Employee whose employment is terminated after the
\nSpecial Severance Period shall be eligible to participate in Purchaser153s regular
\nseparation and severance pay programs on the same terms and conditions as other
\nsimilarly-situated employees of Purchaser.<\/p>\n

(c) To the extent that a Covered Employee becomes eligible to participate in
\na Purchaser Plan, Purchaser shall cause such plan to (i) recognize the service
\nof such Covered Employee with the Company or its Subsidiaries for purposes of
\neligibility, vesting and benefit accrual (other than for purposes of
\neligibility, vesting and benefit accruals under any Purchaser Plan that is a
\ndefined benefit pension plan or a retiree medical plan )under such Purchaser
\nPlan, to the same extent such service was recognized immediately prior to the
\nEffective Time under a comparable Benefit Plan in which such Covered Employee
\nwas eligible to participate immediately prior to the Effective Time;
\nprovided<\/em> that such recognition of service (A) shall not operate to
\nduplicate any benefits of a Covered Employee with respect to the same period of
\nservice and (B) shall not apply for purposes of any Purchaser Plan under which
\nsimilarly-situated employees of Purchaser and its Subsidiaries do not receive
\ncredit for prior service; and (ii) with respect to any Purchaser Plan that
\nprovides health plan or other welfare benefits in which any Covered Employee is
\neligible to participate for the plan year in which such Covered Employee is
\nfirst eligible to participate, (A) cause any pre-existing condition limitations
\nor eligibility waiting periods under such Purchaser Plan to be waived with
\nrespect to such Covered Employee to the extent such limitation would have been
\nwaived or satisfied under the Benefit Plan in which such Covered Employee
\nparticipated immediately prior to the Effective Time, and (B) recognize any
\neligible expenses incurred by such Covered Employee in the year that includes
\nthe Closing Date (or, if later, the year in which such Covered Employee is first
\neligible to participate) for purposes of any applicable deductible and annual
\nout-of-pocket expense requirements under any such Purchaser Plan.<\/p>\n

(d) If requested by Purchaser by no later than ten (10) Business Days prior
\nto the Closing Date, effective as of immediately prior to, and contingent upon,
\nthe Closing, the Company shall adopt such resolutions and\/or amendments to
\nterminate the Company Retirement Savings Plan or any 401(k) plan of the Company
\nor any of its Subsidiaries (collectively, the “Company 401(k) Plan<\/u>“) and
\nthe Covered Employees shall be permitted to roll any eligible rollover
\ndistributions (including, to the extent applicable with respect to any Covered
\nEmployee, loans) into Purchaser153s 401(k) plan. If the Company153s 401(k) Plan is
\nterminated as of immediately prior to the Closing Date, each Covered Employee
\nwho participated or was eligible to participate in the Company 401(k) Plan as of
\nimmediately prior to the Effective Time shall be eligible to participate in
\nPurchaser153s 401(k) plan commencing on the Closing Date. If the Company 401(k) is
\nnot terminated as of immediately prior to the Closing Date, Purchaser shall
\nmaintain the Company 401(k) Plan for the benefit of the Covered Employees until
\nsuch time as they are eligible to participate in Purchaser153s 401(k) Plan and
\nPurchaser will make a<\/p>\n

– 44 –<\/p>\n

\n

discretionary matching contribution at a rate for each Covered Employee
\nparticipating in the Company 401(k) Plan equal to the Company153s 2011
\ndiscretionary matching contribution rate for the 2012 plan year.<\/p>\n

(e) Nothing in this Section 6.03 shall be construed to limit the right of
\nPurchaser or any of its Affiliates (including, following the Closing Date, the
\nSurviving Corporation and its Subsidiaries) to amend or terminate any Benefit
\nPlan or other employee benefit plan, to the extent such amendment or termination
\nis permitted by the terms of the applicable plan, nor shall anything in this
\nSection 6.03 be construed to require Purchaser or any of its Affiliates
\n(including, following the Closing Date, the Surviving Corporation and its
\nSubsidiaries) to maintain any Purchaser Plan or retain the employment of any
\nparticular Covered Employee for any fixed period of time following the Closing
\nDate. This Agreement shall inure exclusively to the benefit of, and be binding
\nupon the Parties hereto and their respective successors, assigns, executors and
\nlegal representatives. Nothing in this Agreement, express or implied, including
\nwithout limitation this Section 6.03, is intended to confer on any person other
\nthan the Parties hereto or their respective successors and assigns any rights,
\nremedies, obligations, or liabilities under or by reason of this Agreement.<\/p>\n

Section 6.04<\/u> Indemnification; Directors153 and Officers153
\nInsurance<\/u>.<\/p>\n

(a) From and after the Effective Time, the Surviving Corporation shall, and
\nPurchaser shall cause the Surviving Corporation to, indemnify and hold harmless,
\nto the fullest extent permitted under applicable Law (and shall also advance
\nexpenses as incurred to the fullest extent permitted under applicable Law and
\nthe certificate of incorporation and bylaws of the Company provided the person
\nto whom expenses are advanced provides an undertaking to repay such advances if
\nit is ultimately determined that such person is not entitled to indemnification
\nby the Surviving Corporation), each present and former director and officer of
\nthe Company or its Subsidiaries (in each case, when acting in such capacity),
\ndetermined as of the Effective Time (collectively, the “Indemnified
\nParties<\/u>“) against any costs or expenses (including reasonable attorneys153
\nfees), judgments, fines, losses, claims, damages or liabilities incurred in
\nconnection with any claim, action, suit, proceeding or investigation, whether
\ncivil, criminal, administrative or investigative, arising out of matters
\nexisting or occurring at or prior to the Effective Time, including the
\ntransactions contemplated by this Agreement; provided<\/em> that the
\nIndemnified Party to whom expenses are advanced provides an undertaking to repay
\nsuch advances if it is ultimately determined that such Indemnified Party is not
\nentitled to indemnification by the Surviving Corporation.<\/p>\n

(b) Prior to the Effective Time, the Company shall and, if the Company is
\nunable to, Purchaser shall cause the Surviving Corporation as of the Effective
\nTime to obtain and fully pay for “tail” insurance (providing only for the Side A
\ncoverage for Indemnified Parties where the existing policies also include Side B
\ncoverage for the Company) with a claims period of at least six (6) years from
\nand after the Effective Time with respect to directors153 and officers153 liability
\ninsurance and fiduciary liability insurance (collectively, “D&O
\nInsurance<\/u>“) with benefits and levels of coverage at least as favorable to
\nthe Indemnified Parties as the Company153s existing policies with respect to
\nmatters existing or occurring at or prior to the Effective Time (including in
\nconnection with this Agreement or the transactions or actions contemplated
\nhereby); provided, however<\/em>, that in no event shall the Company expend
\nfor “tail” insurance policies a premium<\/p>\n

– 45 –<\/p>\n

\n

amount in excess of the amount set forth in the Company Disclosure Schedule.
\nIf the Company and the Surviving Corporation for any reason fail to obtain such
\n“tail” insurance policies as of the Effective Time, the Surviving Corporation
\nshall, and Purchaser shall cause the Surviving Corporation to, continue to
\nmaintain in effect for a period of at least six (6) years from and after the
\nEffective Time the D&O Insurance in place as of the date of this Agreement
\nwith benefits and levels of coverage at least as favorable to the Indemnified
\nParties as provided in the Company153s existing policies as of the date of this
\nAgreement, or the Surviving Corporation shall, and Purchaser shall cause the
\nSurviving Corporation to purchase comparable D&O Insurance for such six-year
\nperiod with benefits and levels of coverage at least as favorable to the
\nIndemnified Parties as provided in the Company153s existing policies as of the
\ndate of this Agreement; provided<\/em>, however<\/em>, that in no event
\nshall Purchaser or the Surviving Corporation be required to expend for such
\npolicies an annual premium amount in excess of 250% of the annual premiums
\ncurrently paid by the Company for such insurance; and, provided<\/em>,
\nfurther<\/em>, that if the annual premiums of such insurance coverage exceed such
\namount, the Surviving Corporation shall, and Purchaser shall cause the Surviving
\nCorporation to, obtain a policy with the greatest coverage available for a cost
\nnot exceeding such amount.<\/p>\n

(c) Any Indemnified Party wishing to claim indemnification under Section
\n6.04(a), upon learning of any claim, action, suit, proceeding or investigation
\ndescribed above, will promptly notify Purchaser; provided<\/em> that failure
\nto so notify will not affect the obligations of Purchaser under Section 6.04(a)
\nunless and to the extent that Purchaser is actually and materially prejudiced as
\na consequence.<\/p>\n

(d) The rights of each Indemnified Party under this Section 6.04 shall be in
\naddition to any rights such individual may have under the certificate of
\nincorporation and bylaws (or other governing documents) of the Company and any
\nof its Subsidiaries, under the DGCL or any other applicable Laws or under any
\nagreement of any Indemnified Party with the Company or any of its Subsidiaries.
\nIf Purchaser, the Surviving Corporation or any of their successors or assigns
\nconsolidates with or merges into any other entity and is not the continuing or
\nsurviving entity of such consolidation or merger or transfers all or
\nsubstantially all of its assets to any other entity, then and in each case,
\nPurchaser will cause proper provision to be made so that the successors and
\nassigns of Purchaser or the Surviving Corporation, as applicable, will assume
\nthe obligations of Purchase or the Surviving Corporation, respectively, set
\nforth in this Section 6.04.<\/p>\n

(e) The provisions of this Section 6.04 are intended to be for the benefit
\nof, and shall be enforceable by, each Indemnified Party as if he or she was a
\nparty to this Agreement.<\/p>\n

Section 6.05<\/u> Exemption from Liability Under Section 16(b)<\/u>.
\nPrior to the Effective Time, Purchaser and the Company shall each take all such
\nsteps as may be necessary or appropriate to cause any disposition of shares of
\nCommon Stock or conversion of any derivative securities in respect of such
\nshares of Common Stock in connection with the consummation of the transactions
\ncontemplated by this Agreement to be exempt under Rule 16b-3 as promulgated
\nunder the Exchange Act.<\/p>\n

– 46 –<\/p>\n

\n

Section 6.06<\/u> Acquisition Proposals<\/u>.<\/p>\n

(a) The Company agrees that it shall not, and shall cause the officers,
\ndirectors, employees, agents and representatives, including any investment
\nbanker, financial advisor, attorney, accountant or other advisor, agent,
\nrepresentative or Affiliate (collectively as to each Party, the
\n“Representatives<\/u>“) of the Company or any of its Subsidiaries not to
\ndirectly or indirectly:<\/p>\n

(i) initiate, solicit or encourage any inquiries or the making of any
\nproposal or offer that constitutes, or could reasonably be expected to lead to,
\nany Acquisition Proposal;<\/p>\n

(ii) engage in, continue or otherwise participate in any discussions or
\nnegotiations regarding, or provide any information or data to any Person
\nrelating to, any Acquisition Proposal; or<\/p>\n

(iii) otherwise knowingly facilitate any effort or attempt to make an
\nAcquisition Proposal.<\/p>\n

(b) Notwithstanding anything in Section 6.06(a) to the contrary, prior to the
\ntime, but not after, the Requisite Stockholder Approval is obtained, the Company
\nmay (A) provide information in response to a request therefor by a Person who
\nhas made an unsolicited bona fide written Acquisition Proposal providing for the
\nacquisition of more than 50% of the assets (on a consolidated basis) or total
\nvoting power of the equity securities of the Company if the Company receives
\nfrom the Person so requesting such information an executed confidentiality
\nagreement on terms not less restrictive to the other party than those contained
\nin the Confidentiality Agreement and substantially concurrently (and in any
\nevent within 24 hours) discloses (and, if applicable, provides copies of) any
\nsuch information to Purchaser to the extent not previously provided to
\nPurchaser; (B) engage or participate in any discussions or negotiations with any
\nPerson who has made such an unsolicited bona fide written Acquisition Proposal;
\nor (C) after having complied with all requirements of Section 6.06(c) and
\nSection 6.06(d), approve, recommend, or otherwise declare advisable or propose
\nto approve, recommend or declare advisable (publicly or otherwise) such an
\nAcquisition Proposal, if and only to the extent that, (x) prior to taking any
\naction described in clause (A), (B) or (C) above, the Company Board determines
\nin good faith after consultation with outside legal counsel that failure to take
\nsuch action, in light of the Acquisition Proposal and the terms of this
\nAgreement, would be inconsistent with the directors153 fiduciary duties under
\napplicable Law, (y) in each such case referred to in clause (A) or (B) above,
\nthe Company Board has determined in good faith based on the information then
\navailable and after consultation with its financial advisor and outside legal
\ncounsel that such Acquisition Proposal either constitutes a Superior Proposal or
\nis reasonably likely to result in a Superior Proposal, and (z) in the case
\nreferred to in clause (C) above, the Company Board determines in good faith
\n(after consultation with its financial advisor and outside legal counsel) that
\nsuch Acquisition Proposal is a Superior Proposal.<\/p>\n

– 47 –<\/p>\n

\n

(c) The Company Board shall not:<\/p>\n

(i) withhold, withdraw, qualify or modify (or publicly propose or resolve to
\nwithhold, withdraw, qualify or modify), in a manner adverse to Purchaser, the
\nCompany Board Recommendation with respect to the Merger; or<\/p>\n

(ii) except as expressly permitted by, and after compliance with, Section
\n8.01(f) hereof, cause or permit the Company to enter into any letter of intent,
\nmemorandum of understanding, agreement in principle, acquisition agreement,
\nmerger agreement or other Contract (other than a confidentiality agreement
\nreferred to in Section 6.06(b) entered into in compliance with Section 6.06(b))
\n(an “Alternative Acquisition Agreement<\/u>“) relating to any Acquisition
\nProposal.<\/p>\n

(d) Notwithstanding anything to the contrary set forth in this Agreement,
\nprior to the time, but not after, the Requisite Stockholder Approval is
\nobtained, the Company Board may withhold, withdraw, qualify or modify the
\nCompany Board Recommendation or approve, recommend or otherwise declare
\nadvisable any Superior Proposal made after the date of this Agreement that was
\nnot solicited, initiated, encouraged or facilitated in breach of this Agreement,
\nif the Company Board determines in good faith, after consultation with outside
\ncounsel, that failure to do so would be inconsistent with the directors153
\nfiduciary duties under applicable law (a “Change of Recommendation<\/u>“);
\nprovided, however<\/em>, that no Change of Recommendation may be made, and,
\nfor the avoidance of doubt, no action referred to in Section 6.06(b)(C) shall be
\ntaken, until after at least 72 hours following Purchaser153s receipt of notice
\nfrom the Company advising that the Company currently intends to take such action
\nand the basis therefor, including all necessary information under Section
\n6.06(f). In determining whether to make a Change of Recommendation or, for the
\navoidance of doubt, whether to take any action referred to in Section
\n6.06(b)(C), in response to a Superior Proposal or otherwise, the Company Board
\nshall take into account any changes to the terms of this Agreement proposed by
\nPurchaser and any other information provided by Purchaser in response to such
\nnotice. Any material amendment to any Acquisition Proposal will be deemed to be
\na new Acquisition Proposal for purposes of this Section 6.06, including with
\nrespect to the notice periods referred to in this Section 6.06(d) and Section
\n6.06(f).<\/p>\n

(e) The Company agrees that it will immediately cease and cause to be
\nterminated any existing activities, discussions or negotiations with any parties
\nconducted prior to the date hereof with respect to any Acquisition Proposal. The
\nCompany agrees that it will take the necessary steps to promptly inform the
\nindividuals or entities referred to in the first sentence hereof of the
\nobligations undertaken in this Section 6.06 and in the Confidentiality
\nAgreement. The Company also agrees that it will promptly request each Person
\nthat has heretofore executed a confidentiality agreement in connection with its
\nconsideration of acquiring it or any of its Subsidiaries to return or destroy
\nall confidential information heretofore furnished to such Person by or on behalf
\nof it or any of its Subsidiaries.<\/p>\n

(f) The Company agrees that it will promptly (and, in any event, within 24
\nhours) notify Purchaser if any inquiries, proposals or offers with respect to an
\nAcquisition Proposal are received by, any such information is requested from, or
\nany such discussions or negotiation are sought to be initiated or continued
\nwith, it or any of its Representatives indicating, in connection with such
\nnotice, the name of such Person and the material terms and conditions of any
\nproposals or offers (including, if applicable, copies of any written requests,\n<\/p>\n

– 48 –<\/p>\n

\n

proposals or offers, including proposed Contracts) and thereafter shall keep
\nPurchaser informed, on a current basis, of any material changes in the status
\nand terms of any such proposals or offers (including any amendments thereto) and
\nany material changes in the status of any such discussions or negotiations,
\nincluding any change in the Company153s intentions as previously notified.<\/p>\n

(g) Nothing contained in this Agreement shall prevent the Company or the
\nCompany Board from complying with Rule 14d-9 and Rule 14e-2 promulgated under
\nthe Exchange Act with respect to an Acquisition Proposal; provided<\/em>
\nthat such Rules will in no way eliminate or modify the effect that any action
\npursuant to such Rules would otherwise have under this Agreement, and nothing in
\nthis clause (g) shall permit the Company to take any action otherwise
\ncontemplated by this Section 6.06 without compliance herewith.<\/p>\n

Section 6.07<\/u> Takeover Laws<\/u>. No Party will take any action that
\nwould cause the transactions contemplated by this Agreement to be subject to
\nrequirements imposed by any Takeover Law and each Party will take all necessary
\nsteps within its control to exempt (or ensure the continued exemption of) those
\ntransactions from, or if necessary challenge the validity or applicability of,
\nany applicable Takeover Law, as now or hereafter in effect.<\/p>\n

Section 6.08<\/u> Financial Statements and Other Current
\nInformation<\/u>.<\/p>\n

(a) As soon as reasonably practicable after they become available, but in no
\nevent more than thirty (30) days after the end of each calendar month ending
\nafter the date hereof, the Company will furnish to Purchaser (i) consolidated
\nfinancial statements (including balance sheets, statements of operations and
\nstockholders153 equity) of the Company or any of its Subsidiaries (to the extent
\navailable) as of and for such month then ended, (ii) to the extent available,
\ninternal management reports showing actual financial performance against plan
\nand previous period and (iii) to the extent permitted by applicable Law, any
\nreports provided to the Company Board or any committee thereof relating to the
\nfinancial performance and risk management of the Company or any of its
\nSubsidiaries.<\/p>\n

(b) As soon as reasonably practicable after they become available, the
\nCompany will provide to Purchaser copies of audited consolidated statements of
\nfinancial condition of the Company and its Subsidiaries as of December 31 for
\nthe fiscal year 2011 and the related audited consolidated statements of
\noperations, of comprehensive income, of changes in stockholders153 equity and of
\ncash flows for the fiscal year ended December 31, 2011 (the “Audited 2011
\nFinancials<\/u>“) with an unqualified opinion from KPMG LLP as the auditor of the
\nCompany.<\/p>\n

Section 6.09<\/u> Stockholders Meeting<\/u>.<\/strong> The Company
\nwill take, in accordance with applicable Law and its certificate of
\nincorporation and bylaws, all action necessary to convene a meeting of holders
\nof Shares (the “Stockholders Meeting<\/u>“) as promptly as practicable after
\nthe date hereof, to consider and vote upon the adoption of this Agreement, and
\nshall not postpone or adjourn such meeting except to the extent required by Law.
\nSubject to Section 6.06 hereof, the Company Board shall recommend the adoption
\nof this Agreement by the Requisite Stockholder Approval and shall take all
\nlawful action to solicit such adoption of this Agreement. The obligation of the
\nCompany to hold the Stockholders Meeting shall not be affected by any<\/p>\n

– 49 –<\/p>\n

\n

Acquisition Proposal or other event or circumstance and the Company agrees
\nthat it will not submit any Acquisition Proposal to its stockholders for a vote,
\nunless this Agreement is terminated in accordance with its terms.
\nNotwithstanding the foregoing, the Company153s obligations under this Section 6.09
\nshall be discharged in the event that a true and correct copy of the executed
\nirrevocable written consent in the form attached hereto as Exhibit B<\/u>
\n(the “Written Consent<\/u>“) adopting and approving this Agreement and the
\nMerger, and constituting the Requisite Stockholder Approval, shall have been
\nsigned, dated and delivered to the Company in accordance with Section 228 of the
\nDGCL (and a copy thereof shall have been delivered to Purchaser).<\/p>\n

Section 6.10<\/u> Proxy Filing; Information Supplied<\/u>.<\/p>\n

(a) The Company shall prepare and file with the SEC and mail to the holders
\nof the Shares, as promptly as practicable after the date of this Agreement, (i)
\nin the event that the Requisite Stockholder Approval in the form of Written
\nConsent is delivered to the Company in accordance with Section 6.09, an
\ninformation statement of the type contemplated by Rule 14c-2 promulgated under
\nthe Exchange Act related to the Merger and this Agreement (such information
\nstatement, including any amendment or supplement thereto, the “Information
\nStatement<\/u>“) or (ii) in the event that the Requisite Stockholder Approval in
\nthe form of Written Consent is not delivered to the Company in accordance with
\nSection 6.09, a proxy statement in preliminary form relating to the Merger and
\nthis Agreement (such proxy statement, including any amendment or supplement
\nthereto, the “Proxy Statement<\/u>“). The Company agrees, as to it and its
\nSubsidiaries, that the Proxy Statement or Information Statement, as the case may
\nbe, will comply in all material respects with the applicable provisions of the
\nExchange Act and the rules and regulations thereunder. Each Party agrees, as to
\nit and its Affiliates, that none of the information supplied by it or any of its
\nAffiliates for inclusion or incorporation by reference in the Proxy Statement or
\nInformation Statement, as the case may be, will, at the date of mailing to
\nstockholders of the Company and at the time of the Stockholders Meeting, if and
\nas applicable, contain any untrue statement of a material fact or omit to state
\nany material fact required to be stated therein or necessary in order to make
\nthe statements therein, in light of the circumstances under which they were
\nmade, not misleading.<\/p>\n

(b) The Company shall afford Purchaser a reasonable opportunity to review and
\ncomment on the Proxy Statement or Information Statement, as the case may be,
\nprior to its filing with the SEC, including any amendments or supplements
\nthereto, and shall give due consideration to all the reasonable additions,
\ndeletions or changes suggested thereto by Purchaser. The Company will promptly
\nadvise Purchaser if at any time prior to the Effective Time the Company shall
\nobtain Knowledge of any facts that might make it necessary to amend or
\nsupplement the Proxy Statement or Information Statement, as the case may be, in
\norder to make the statements contained therein not misleading or to comply with
\napplicable Law. The Company shall promptly notify Purchaser of the receipt of
\nall comments from the SEC with respect to the Proxy Statement or Information
\nStatement, as the case may be, and of any request by the SEC for any amendment
\nor supplement thereto or for additional information and shall promptly provide
\nto Purchaser copies of all correspondence between the Company and\/or any of its
\nRepresentatives and the SEC with respect to the Proxy Statement or Information
\nStatement, as the case may be, and shall provide Purchaser an opportunity to
\nreview and comment on any such amendment, supplement or response to the SEC and
\nshall give due consideration to all the<\/p>\n

– 50 –<\/p>\n

\n

reasonable additions, deletions or changes suggested thereto by Purchaser.
\nEach of Purchaser and the Company shall use its reasonable best efforts promptly
\nto provide responses to the SEC with respect to all comments received on the
\nProxy Statement or Information Statement, as the case may be, from the SEC. To
\nthe extent required by applicable Law in the good faith judgment of the Company,
\nthe Company shall, as promptly as reasonably practicable, prepare, file and
\ndistribute to its stockholders any supplement or amendment to the Proxy
\nStatement or Information Statement, as the case may be, if any event shall occur
\nthat requires such action.<\/p>\n

(c) In connection with any Written Consent, the Company shall take all
\nactions necessary to comply, and shall comply, in all respects, with the DGCL,
\nincluding Section 228 and Section 262 thereof, the certificate of incorporation
\nof and bylaws of the Company, the Exchange Act, including Regulation 14C and
\nSchedule 14C promulgated thereunder, and the rules and regulations of NASDAQ,
\nand shall include the notice required by Section 262(d)(2) of the DGCL in the
\nInformation Statement. For the avoidance of doubt, the signing, dating and
\ndelivery to the Company of the Written Consent in accordance with Section 228 of
\nthe DGCL shall constitute the obtaining of the Requisite Stockholder Approval
\nfor all purposes under this Agreement.<\/p>\n

Section 6.11<\/u> Notification of Certain Matters<\/u>. The Company and
\nPurchaser will give prompt notice to the other of any fact, event or
\ncircumstance known to it that (a) is reasonably likely, individually or taken
\ntogether with all other facts, events and circumstances known to it, to result
\nin any Material Adverse Effect or Purchaser Material Adverse Effect,
\nrespectively, or (b) would cause or constitute a material breach of any of its
\nrepresentations, warranties, covenants or agreements contained herein that
\nreasonably could be expected to give rise, individually or in the aggregate, to
\nthe failure of a condition in Article VII; provided<\/em>, however<\/em>,
\nthat failure to give such notice shall not separately constitute a failure of
\nany condition in Article VII or a basis to terminate this Agreement unless the
\nunderlying fact, event or circumstance would independently result in such
\nfailure or provide such basis.<\/p>\n

Section 6.12<\/u> Stock Exchange Delisting<\/u>. Prior to the Closing
\nDate, the Company shall cooperate with Purchaser and use reasonable best efforts
\nto take, or cause to be taken, all actions, and do or cause to be done all
\nthings, reasonably necessary, proper or advisable on its part under applicable
\nLaws and rules and policies of NASDAQ to enable the delisting by the Surviving
\nCorporation of the Shares from NASDAQ and the deregistration of the Shares under
\nthe Exchange Act as promptly as practicable after the Effective Time, and in any
\nevent no more than ten (10) days after the Closing Date.<\/p>\n

Section 6.13<\/u> Related Party Contracts<\/u>. Prior to the Effective
\nTime, the Company shall have taken all actions necessary to terminate, and shall
\ncause to be terminated, each Related Party Contract other than those listed on
\nSection 6.13 of the Company Disclosure Schedule, in each case without any
\nfurther liability or obligation of the Company, the Surviving Corporation,
\nPurchaser or any of their respective Subsidiaries or Affiliates and, in
\nconnection therewith, the Company (or its applicable Subsidiary) shall have
\nreceived from the other party to such Related Party Contract a release in favor
\nof the Company, the Surviving Corporation, Purchaser and their respective
\nSubsidiaries and Affiliates from any and all liabilities or obligations arising
\nout of such Related Party Contract.<\/p>\n

– 51 –<\/p>\n

\n

Section 6.14<\/u> Merger Sub Compliance<\/u>. Purchaser shall cause
\nMerger Sub to comply with all of its obligations under or related to this
\nAgreement.<\/p>\n

ARTICLE VII <\/strong><\/p>\n

CONDITIONS PRECEDENT <\/strong><\/p>\n

Section 7.01<\/u> Conditions to Each Party153s Obligation to Effect the
\nMerger<\/u>. The respective obligations of the Parties to effect the Merger shall
\nbe subject to the satisfaction or waiver at or prior to the Effective Time of
\neach of the following conditions:<\/p>\n

(a) Stockholder Approval<\/u>. This Agreement shall have been adopted and
\napproved by holders of Shares constituting the Requisite Stockholder Approval.\n<\/p>\n

(b) No Injunctions or Restraints; Illegality<\/u>. No order, injunction or
\ndecree issued by any court or agency of competent jurisdiction or other Law
\npreventing or making illegal the consummation of the Merger or any of the other
\ntransactions contemplated by this Agreement shall be in effect.<\/p>\n

(c) Regulatory Approvals<\/u>. The Regulatory Approvals required from the
\nFederal Reserve and the OCC (the “Requisite Regulatory Consents<\/u>“), and
\nthe JFSA Approval, shall have been obtained and shall remain in full force and
\neffect and all statutory waiting periods in respect thereof shall have expired,
\nwithout the imposition of the Burdensome Condition in connection therewith.<\/p>\n

Section 7.02<\/u> Conditions to Obligations of Purchaser and Merger
\nSub<\/u>. The obligations of Purchaser and Merger Sub to effect the Merger are
\nalso subject to the satisfaction, or waiver by Purchaser, at or prior to the
\nEffective Time, of the following conditions:<\/p>\n

(a) Representations and Warranties<\/u>. The representations and warranties
\nof the Company set forth in this Agreement shall be true and correct as of the
\ndate of this Agreement and as of the Effective Time as though made on and as of
\nthe Effective Time (except that representations and warranties that by their
\nterms speak specifically as of the date of this Agreement or another date shall
\nbe true and correct as of such date); provided<\/em>, however<\/em>, that
\nno representation or warranty of the Company (other than the representations and
\nwarranties set forth in (i) the first two sentences of Section 3.02(a)(i) and
\nthe first sentence of Section 3.02(a)(ii), Section 3.02(d)(i), Section
\n3.02(d)(iii), Section 3.02(d)(iv)(1)(x), Section 3.02(z) and Section 3.02(bb),
\nwhich shall be true and correct in all respects, (ii) Section 3.02(b), which
\nshall be true and correct other than for such failures to be true and correct as
\nare de minimis<\/em> in effect, and (iii) Section 3.02(a) (excluding the
\nfirst two sentences of Section 3.02(a)(i) and the first sentence of Section
\n3.02(a)(ii)) and Section 3.02(c), which shall be true and correct in all
\nmaterial respects) shall be deemed untrue or incorrect for any purposes
\nhereunder as a consequence of the existence of any fact, event or circumstance
\ninconsistent with such representation or warranty, unless such fact, event or
\ncircumstance, individually or taken together with all other facts, events or
\ncircumstances inconsistent with any representation or warranty of the Company,
\nhas had or would reasonably be expected to result in a Material Adverse Effect
\non the Company and its Subsidiaries taken as a whole; provided<\/em>,
\nfurther<\/em>, that for<\/p>\n

– 52 –<\/p>\n

\n

purposes of determining whether a representation or warranty is true and
\ncorrect for purposes of this Section 7.02(a), any qualification or exception
\nfor, or reference to, materiality (including the terms “material,” “materially,”
\n“in all material respects,” or similar terms or phrases) in any such
\nrepresentation or warranty shall be disregarded; and Purchaser shall have
\nreceived a certificate signed on behalf of the Company by the Chief Executive
\nOfficer or the Chief Financial Officer of the Company to the foregoing effect.\n<\/p>\n

(b) Performance of Obligations of the Company<\/u>. The Company shall have
\nperformed in all material respects all obligations required to be performed by
\nit under this Agreement at or prior to the Effective Time; and Purchaser shall
\nhave received a certificate signed on behalf of the Company by the Chief
\nExecutive Officer or the Chief Financial Officer of the Company to such effect.\n<\/p>\n

(c) Audited 2011 Financials<\/u>. The Company shall have provided to
\nPurchaser the Audited 2011 Financials with an unqualified opinion from KPMG LLP
\nas the auditor of the Company.<\/p>\n

(d) Termination of Certain Regulatory Agreements<\/u>. (i) the Written
\nAgreement by and between the Company and the Federal Reserve Bank of San
\nFrancisco, dated May 11, 2010 shall have been terminated, (ii) the Operating
\nAgreement by and between Bank and the OCC, dated September 2, 2010 shall have
\nbeen terminated or the OCC shall not have informed Purchaser and the Company
\nthat such Operating Agreement shall survive consummation of the Bank Merger and
\n(iii) neither the Company nor any of its Subsidiaries shall be a party to any
\nsimilar agreement with any Governmental Entity.<\/p>\n

Section 7.03<\/u> Conditions to Obligations of the Company<\/u>. The
\nobligation of the Company to effect the Merger is also subject to the
\nsatisfaction or waiver by the Company at or prior to the Effective Time of the
\nfollowing conditions:<\/p>\n

(a) Representations and Warranties<\/u>. The representations and warranties
\nof Purchaser set forth in this Agreement shall be true and correct as of the
\ndate of this Agreement and as of the Effective Time as though made on and as of
\nthe Effective Time (except that representations and warranties that by their
\nterms speak specifically as of the date of this Agreement or another date shall
\nbe true and correct as of such date); provided<\/em>, however<\/em>, that
\nno representation or warranty of Purchaser (other than the representations and
\nwarranties set forth in Section 4.01(e), which shall be true and correct in all
\nrespects) shall be deemed untrue or incorrect for any purposes hereunder as a
\nconsequence of the existence of any fact, event or circumstance inconsistent
\nwith such representation or warranty, unless such fact, event or circumstance,
\nindividually or taken together with all other facts, events or circumstances
\ninconsistent with any representation or warranty of Purchaser, has had or would
\nreasonably be expected to have a Purchaser Material Adverse Effect;
\nprovided<\/em>, further<\/em>, that for purposes of determining whether a
\nrepresentation or warranty is true and correct for purposes of this Section
\n7.03(a), any qualification or exception for, or reference to, materiality
\n(including the terms “material,” “materially,” “in all material respects,”
\n“Material Adverse Effect” or similar terms or phrases) in any such
\nrepresentation or warranty shall be disregarded; and the Company shall have
\nreceived a certificate signed on behalf of Purchaser by the Chief Executive
\nOfficer or the Chief Financial Officer of Purchaser to the foregoing effect.\n<\/p>\n

– 53 –<\/p>\n

\n

(b) Performance of Obligations of Purchaser<\/u>. Each of Purchaser and
\nMerger Sub shall have performed in all material respects all obligations
\nrequired to be performed by it under this Agreement at or prior to the Effective
\nTime, and the Company shall have received a certificate signed on behalf of
\nPurchaser by the Chief Executive Officer or the Chief Financial Officer of
\nPurchaser to such effect.<\/p>\n

ARTICLE VIII <\/strong><\/p>\n

TERMINATION AND AMENDMENT <\/strong><\/p>\n

Section 8.01<\/u> Termination<\/u>. This Agreement may be terminated and
\nthe Merger may be abandoned, at any time prior to the Effective Time:<\/p>\n

(a) by mutual consent of the Company and Purchaser in a written instrument
\nauthorized by the Boards of Directors of the Company and Purchaser;<\/p>\n

(b) by either the Company or Purchaser, if any Governmental Entity that must
\ngrant a Requisite Regulatory Consent or the JFSA Approval has denied approval of
\nthe Merger and such denial has become final and nonappealable or any
\nGovernmental Entity of competent jurisdiction shall have issued a final and
\nnonappealable order, injunction or decree permanently enjoining or otherwise
\nprohibiting or making illegal the consummation of the transactions contemplated
\nby this Agreement;<\/p>\n

(c) by either the Company or Purchaser, if the Merger shall not have been
\nconsummated on or before December 3, 2012 (the “Outside Date<\/u>“) unless the
\nfailure of the Closing to occur by such date shall be due to the failure of the
\nParty seeking to terminate this Agreement to perform or observe the covenants
\nand agreements of such Party set forth in this Agreement;<\/p>\n

(d) by either the Company or Purchaser (provided<\/em> that the
\nterminating Party is not then in material breach of any representation,
\nwarranty, covenant or other agreement contained herein), if there shall have
\nbeen a breach of any of the covenants or agreements or any of the
\nrepresentations or warranties set forth in this Agreement on the part of the
\nCompany, in the case of a termination by Purchaser, or on the part of Purchaser,
\nin the case of a termination by the Company, which breach, either individually
\nor in the aggregate with other breaches by such Party, would result in, if
\noccurring or continuing on the Closing Date, the failure of the conditions set
\nforth in Section 7.02 or 7.03, as the case may be, and which is not cured within
\nthe earlier of (i) thirty (30) days following written notice to the Party
\ncommitting such breach and (ii) the Outside Date or by its nature or timing
\ncannot be cured within such time period;<\/p>\n

(e) unless the Requisite Stockholder Approval shall have been obtained
\npursuant to the Written Consent, by either the Company or Purchaser, if the
\nadoption of this Agreement by holders of Shares constituting the Requisite
\nStockholder Approval referred to in Section 7.01(a) shall not have been obtained
\nat the Stockholders Meeting or at any adjournment or postponement of the
\nStockholders Meeting taken in accordance with this Agreement;<\/p>\n

(f) by the Company, at any time prior to the time the Requisite Stockholder
\nApproval is obtained, if (i) the Company is not in material breach of any of the
\nterms of this<\/p>\n

– 54 –<\/p>\n

\n

Agreement, (ii) the Company Board authorizes the Company, subject to
\ncomplying with the terms of this Agreement, to enter into an Alternative
\nAcquisition Agreement with respect to a Superior Proposal and the Company
\nnotifies Purchaser in writing that it intends to enter into such a Contract,
\nattaching the final version of such Contract to such notice, (iii) Purchaser
\ndoes not make, within five (5) business days of receipt of the Company153s written
\nnotification of its intention to enter into a binding Contract for a Superior
\nProposal, an offer that the Company Board determines, in good faith after
\nconsultation with its financial advisor and outside legal counsel, is at least
\nas favorable, from a financial point of view, to the stockholders of the Company
\nas the Superior Proposal, (iv) the Company prior to such termination pays to
\nPurchaser in immediately available funds any fees required to be paid pursuant
\nto Section 8.02 and (v) the Company substantially concurrently enters into the
\nContract attached to the notice referred to in clause (ii) of this sentence. The
\nCompany agrees (x) that it will not enter into the binding Contract referred to
\nin clause (ii) above until at least the sixth business day after it has provided
\nthe notice to Purchaser required thereby, (y) to notify Purchaser promptly if
\nits intention to enter into the written Contract referred to in its notification
\nchanges and (z) during such five business day period, to negotiate in good faith
\nwith Purchaser with respect to any revisions to the terms of the transaction
\ncontemplated by this Agreement proposed by Purchaser in response to a Superior
\nProposal, if any;<\/p>\n

(g) if the Requisite Stockholder Approval in the form of the Written Consent
\nshall not have been signed, dated and delivered to the Company in accordance
\nwith Section 228 of the DGCL (or a copy thereof shall not have been delivered to
\nPurchaser) or shall not have become effective in accordance with Section 10 of
\nArticle II of the bylaws of the Company for purposes of the bylaws of the
\nCompany and the DGCL, by 11:59 p.m. (Pacific Time) on the date hereof, by
\nPurchaser, at any time until the earlier of (i) the initial mailing of the Proxy
\nStatement to the stockholders of the Company in accordance with Section 6.10 and
\n(ii) the delivery of the Requisite Stockholder Approval in the form of Written
\nConsent;<\/p>\n

(h) by Purchaser, at any time prior to the time the Requisite Stockholder
\nApproval is obtained pursuant to the Written Consent, if (i) the Company Board
\nshall have made a Change of Recommendation; (ii) the Company shall have
\nmaterially violated Section 6.06, Section 6.07, Section 6.09 or Section 6.10;
\n(iii) at any time following receipt of an Acquisition Proposal, the Company
\nBoard shall have failed to reaffirm its approval or recommendation of this
\nAgreement and the Merger as promptly as practicable (but in any event prior to
\nthe earlier of (x) within three (3) business days after receipt of any written
\nrequest to do so from Purchaser and (y) the date of the Stockholders Meeting);
\nor (iv) a tender offer or exchange offer for outstanding shares of the Common
\nStock shall have been publicly disclosed (other than by Purchaser or an
\nAffiliate of Purchaser) and, prior to the earlier of (x) the date prior to the
\ndate of the Stockholders Meeting and (y) eleven (11) business days after the
\ncommencement of such tender or exchange offer pursuant to Rule 14d-2 under the
\nExchange Act, the Company Board fails to recommend unequivocally against
\nacceptance of such offer.<\/p>\n

The Party desiring to terminate this Agreement pursuant to clause (a), (b),
\n(c), (d), (e), (f), (g) or (h) of this Section 8.01 shall give written notice of
\nsuch termination to the other Party in accordance with Section 9.04, specifying
\nthe provision or provisions hereof pursuant to which such termination is
\neffected.<\/p>\n

– 55 –<\/p>\n

\n

Section 8.02<\/u> Effect of Termination<\/u>.<\/p>\n

(a) In the event of termination of this Agreement by either the Company or
\nPurchaser as provided in Section 8.01, this Agreement shall forthwith become
\nvoid and have no effect, and none of the Company, Purchaser, any of their
\nrespective Subsidiaries or any of the officers or directors of any of them shall
\nhave any liability of any nature whatsoever under this Agreement, or in
\nconnection with the transactions contemplated by this Agreement, except that (i)
\nSection 6.02(b), 8.02, 8.03, 9.03, 9.04, 9.05, 9.06, 9.08, 9.09, 9.13 and 9.14
\nshall survive any termination of this Agreement, and (ii) neither the Company
\nnor Purchaser shall be relieved or released from any liabilities or damages
\narising out of its knowing breach of any provision of this Agreement.<\/p>\n

(b) In the event that this Agreement is terminated by Purchaser pursuant to
\nSection 8.01(g), then the Company shall promptly, but in no event later than two
\n(2) days after the date of such termination, pay Purchaser all the documented
\nout-of-pocket expenses incurred by Purchaser or any of its Affiliates in
\nconnection with this Agreement and the transactions contemplated by this
\nAgreement up to a maximum amount of $10,000,000, payable by wire transfer of
\nsame day funds.<\/p>\n

(c) In the event that (i) a bona fide<\/em> Acquisition Proposal shall
\nhave been made to the Company or any of its Subsidiaries or any of its
\nstockholders or any Person shall have publicly announced an intention (whether
\nor not conditional) to make an Acquisition Proposal with respect to the Company
\nor any of its Subsidiaries (and such Acquisition Proposal or publicly announced
\nintention shall not have been publicly withdrawn without qualification at least
\n(1) twenty (20) business days prior to, with respect to any termination pursuant
\nto Section 8.01(c), the date of termination, and (2) at least ten (10) business
\ndays prior to, with respect to termination pursuant to Section 8.01(e), the date
\nof the Stockholders Meeting) and thereafter this Agreement is terminated by
\neither Purchaser or the Company pursuant (x) to Section 8.01(c) without (I) a
\nvote of the Company153s stockholder with respect to the Requisite Stockholder
\nApproval having occurred and (II) the Requisite Stockholder Approval otherwise
\nhaving been obtained pursuant to the Written Consent or (y) Section 8.01(e) and,
\nin the case of termination pursuant to Section 8.01(e), on or prior to the date
\nof the Stockholders Meeting, no event giving rise to Purchaser153s right to
\nterminate under Section 8.01(h) shall have occurred, (ii) this Agreement is
\nterminated (A) by Purchaser pursuant to Section 8.01(h) or (B) by either
\nPurchaser or the Company pursuant to Section 8.01(e) and, on or prior to the
\ndate of the Stockholders Meeting, any event giving rise to Purchaser153s right to
\nterminate this Agreement under Section 8.01(h) shall have occurred or (iii) this
\nAgreement is terminated by the Company pursuant to Section 8.01(f) then the
\nCompany shall promptly, but in no event later than two (2) days after the date
\nof such termination, pay Purchaser a termination fee of $52,500,000 (the
\n“Termination Fee<\/u>“) (provided, however<\/em>, that the Termination Fee
\nto be paid pursuant to clause (iii) shall be paid as set forth in Section
\n8.01(f)) and shall promptly, but in no event later than two (2) days after being
\nnotified of such by Purchaser, pay all of the documented out-of-pocket expenses
\nincurred by Purchaser or Merger Sub in connection with this Agreement and the
\ntransactions contemplated by this Agreement up to a maximum amount of
\n$15,000,000, in each case payable by wire transfer of same day funds;
\nprovided<\/em>, however<\/em>, that no Termination Fee shall be payable to
\nPurchaser pursuant to clause (i) of this Section 8.02(c) unless and until within
\ntwelve (12) months of such termination, the Company or any of its Subsidiaries
\nshall have entered into an<\/p>\n

– 56 –<\/p>\n

\n

Alternate Acquisition Agreement with respect to, or shall have consummated or
\nshall have approved or recommended to the Company153s stockholders or otherwise
\nnot opposed, an Acquisition Proposal (substituting in both instances “50%” for
\n“15%” in the definition of “Acquisition Proposal”); provided<\/em> that for
\npurposes of clause (i) of this Section 8.02(c), an Acquisition Proposal shall
\nnot be deemed to have been “publicly withdrawn” by any Person if, within twelve
\n(12) months of such termination, the Company or any of its Subsidiaries shall
\nhave entered into an Alternative Acquisition Agreement (other than a
\nconfidentiality agreement) with respect to, or shall have consummated or shall
\nhave approved or recommended to the Company153s stockholders or otherwise not
\nopposed, an Acquisition Proposal made by or on behalf of such Person or any of
\nits Affiliates; provided<\/em>, further<\/em>, that in the event that such
\nTermination Fee becomes payable and is paid by the Company to Purchaser pursuant
\nto this Section 8.02(c), except in the event of fraud or willful breach of this
\nAgreement by the Company or any of its Affiliates, the Termination Fee shall be
\nPurchaser153s and Merger Sub153s sole and exclusive remedy arising out of a
\ntermination of this Agreement. If this Agreement is terminated (a) by Purchaser
\nor the Company pursuant to Section 8.01(b) and at the time of such termination,
\nthe Company is not then in material breach of any representation, warranty,
\ncovenant or other agreement contained in this Agreement; (b) by Purchaser or the
\nCompany pursuant to Section 8.01(c) and, at the time of such termination, (i)
\nthe condition to closing set forth in Section 7.01(c) has not been satisfied or
\nwaived in writing, (ii) all the other conditions to closing set forth in Section
\n7.01 and Section 7.02 shall have been satisfied (or are capable of being
\nsatisfied) or waived in writing and (iii) the Company is not then in material
\nbreach of any representation, warranty, covenant or other agreement contained in
\nthis Agreement or (c) by the Company pursuant to Section 8.01(d) based upon a
\nmaterial breach by Purchaser or Merger Sub of Section 4.01(g), 5.01 or 6.01,
\nthen, in light of the Company153s postponement or cancellation of planned upgrades
\nof its information technology systems and the costs the Company will incur in
\ncomplying with its cooperation obligations set forth in Section 6.02(a),
\nPurchaser shall promptly, but in no event later than two (2) days after the date
\nof any such termination, reimburse the Company by wire transfer of same day
\nfunds for all fees, expenses and costs determined by the Company in good faith
\nto have been expended or incurred by it in connection with the transactions
\ncontemplated by this Agreement or the termination of this Agreement, including
\nin respect of counsel, investment bankers, information technology systems and
\ncore systems conversion and employee time; provided<\/u> that Purchaser shall
\nnot be required to reimburse the Company more than $25,000,000. Each Party
\nacknowledges that the agreements contained in this Section 8.02 are an integral
\npart of the transactions contemplated by this Agreement, and that, without these
\nagreements, the other Party would not enter into this Agreement; accordingly, if
\nthe Party that owes a payment pursuant to this Section 8.02 fails to promptly
\npay the amount due pursuant to this Section 8.02(c), and, in order to obtain
\nsuch payment, the other Party commences a suit that results in a final,
\nnonappealable judgment against such owing Party for the applicable amount set
\nforth in this Section 8.02 or any portion of such fee, such owing Party shall
\npay to the other Party its costs and expenses (including attorneys153 fees) in
\nconnection with such suit, together with interest on the amount of the fee at
\nthe prime rate published in The Wall Street Journal<\/em> on the date such
\npayment was required to be made through the date of payment.<\/p>\n

Section 8.03<\/u> Fees and Expenses<\/u>. Except as otherwise provided in
\nSection 8.02 and except with respect to (x) costs and expenses of printing and
\nmailing the Proxy Statement or Information Statement, as applicable, and (y) all
\nfiling and other fees paid to the SEC in connection with the Merger, each of
\nwhich in the case of clause (x) or clause (y) shall be borne<\/p>\n

– 57 –<\/p>\n

\n

equally by the Company and Purchaser, all fees and expenses incurred in
\nconnection with the Merger, this Agreement and the transactions contemplated by
\nthis Agreement shall be paid by the Party incurring such fees or expenses,
\nwhether or not the Merger is consummated.<\/p>\n

Section 8.04<\/u> Extension; Waiver<\/u>. At any time prior to the
\nEffective Time, the Parties, by action taken or authorized by their respective
\nBoards of Directors, may, to the extent legally allowed, (a) extend the time for
\nthe performance of any of the obligations or other acts of the other Party, (b)
\nwaive any inaccuracies in the representations and warranties of the other Party
\ncontained in this Agreement or (c) waive compliance by the other Party with any
\nof the agreements or conditions contained in this Agreement. Any agreement on
\nthe part of a party to any such extension or waiver shall be valid only if set
\nforth in a written instrument signed on behalf of such Party, but such extension
\nor waiver or failure to insist on strict compliance with an obligation,
\ncovenant, agreement or condition shall not operate as a waiver of, or estoppel
\nwith respect to, any subsequent or other failure.<\/p>\n

ARTICLE IX <\/strong><\/p>\n

GENERAL PROVISIONS <\/strong><\/p>\n

Section 9.01<\/u> Nonsurvival of Representations, Warranties and
\nAgreements<\/u>. None of the representations, warranties, covenants and
\nagreements set forth in this Agreement or in any instrument delivered pursuant
\nto this Agreement shall survive the Effective Time, except for Section 6.04 and
\nfor those other covenants and agreements contained in this Agreement that by
\ntheir terms apply or are to be performed in whole or in part after the Effective
\nTime.<\/p>\n

Section 9.02<\/u> Modification or Amendment<\/u>. Subject to the
\nprovisions of the applicable Laws, at any time prior to the Effective Time, the
\nParties hereto may modify or amend this Agreement, by written agreement executed
\nand delivered by duly authorized officers of the respective Parties.<\/p>\n

Section 9.03<\/u> Waiver of Conditions<\/u>. The conditions to each of
\nthe Parties153 obligations to consummate the Merger are for the sole benefit of
\nsuch Party and may be waived by such Party in whole or in part to the extent
\npermitted by applicable Laws.<\/p>\n

Section 9.04<\/u> Notices<\/u>. All notices and other communications in
\nconnection with this Agreement shall be in writing and shall be deemed given if
\ndelivered personally, sent via facsimile or email (with confirmation), mailed by
\nregistered or certified mail (return receipt requested) or delivered by an
\nexpress courier (with confirmation) to the Parties at the following addresses
\n(or at such other address for a party as shall be specified by like notice):\n<\/p>\n

If to Purchaser or Merger Sub, to:<\/p>\n

UnionBanCal Corporation<\/p>\n

400 California Street<\/p>\n

San Francisco, California 94104<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Attention:<\/p>\n<\/td>\n

<\/td>\n\n

Todd H. Baker, EVP and Strategy Director,<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Corporate Strategy & Development, Union Bank, N.A.<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

<\/td>\n\n

(415) 765-2950<\/p>\n<\/td>\n<\/tr>\n

\n

Email:<\/p>\n<\/td>\n

<\/td>\n\n

todd.baker@unionbank.com<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

– 58 –<\/p>\n

\n

with copies to:<\/p>\n

UnionBanCal Corporation<\/p>\n

445 South Figueroa Street, 12th Floor<\/p>\n

MC G12-300 Los Angeles, CA 90071-1602<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Attention:<\/p>\n<\/td>\n

<\/td>\n\n

Mark T. Gillett, SVP and Senior Counsel,<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Union Bank, N.A.<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

<\/td>\n\n

(213) 236-7575<\/p>\n<\/td>\n<\/tr>\n

\n

Email:<\/p>\n<\/td>\n

<\/td>\n\n

mark.gillett@unionbank.com<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

and<\/p>\n

Sullivan & Cromwell LLP<\/p>\n

125 Broad Street<\/p>\n

New York, New York 10004<\/p>\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Attention:<\/p>\n<\/td>\n

<\/td>\n\n

H. Rodgin Cohen<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Donald J. Toumey<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

<\/td>\n\n

(212) 558-3588<\/p>\n<\/td>\n<\/tr>\n

\n

Email:<\/p>\n<\/td>\n

<\/td>\n\n

cohenhr@sullcrom.com<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

toumeyd@sullcrom.com<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If to the Company, to:<\/p>\n

Pacific Capital Bancorp<\/p>\n

1021 Anacapa Street, 3rd<\/sup> Floor<\/p>\n

Santa Barbara, California 93101<\/p>\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Attention:<\/p>\n<\/td>\n

<\/td>\n\n

Carl B. Webb, Chief Executive Officer<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

<\/td>\n\n

(805) 882-3888<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

with a copy to:<\/p>\n

Wachtell, Lipton, Rosen & Katz<\/p>\n

51 West 52nd Street<\/p>\n

New York, New York 10019<\/p>\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Attention:<\/p>\n<\/td>\n

<\/td>\n\n

Edward D. Herlihy<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Lawrence S. Makow<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

<\/td>\n\n

(212) 403-2000<\/p>\n<\/td>\n<\/tr>\n

\n

Email:<\/p>\n<\/td>\n

<\/td>\n\n

EDHerlihy@wlrk.com<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

LSMakow@wlrk.com<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Section 9.05<\/u> Counterparts<\/u>. This Agreement may be executed in
\ntwo (2) or more counterparts (including by facsimile or other electronic means),
\nall of which shall be considered one and the same agreement and shall become
\neffective when counterparts have been signed by each of the Parties and
\ndelivered to the other Party, it being understood that each Party need not sign
\nthe same counterpart.<\/p>\n

– 59 –<\/p>\n

\n

Section 9.06<\/u> Entire Agreement<\/u>. This Agreement (including any
\nexhibits hereto, the documents and the instruments referred to in this
\nAgreement) constitutes the entire agreement and supersedes all prior agreements
\nand understandings, both written and oral, among the Parties with respect to the
\nsubject matter of this Agreement, other than the Confidentiality Agreement and
\nthe Non-Disclosure Agreement.<\/p>\n

Section 9.07<\/u> Severability<\/u>. If any provision of this Agreement
\nor the application thereof to any person or circumstance is determined by a
\ncourt of competent jurisdiction to be invalid, void or unenforceable, the
\nremaining provisions, or the application of such provision to persons or
\ncircumstances other than those as to which it has been held invalid or
\nunenforceable, will remain in full force and effect and will in no way be
\naffected, impaired or invalidated thereby, so long as the economic or legal
\nsubstance of the transactions contemplated hereby is not affected in any manner
\nmaterially adverse to any Party. Upon such determination, the parties will
\nnegotiate in good faith in an effort to agree upon a suitable and equitable
\nsubstitute provision to effect the original intent of the parties.<\/p>\n

Section 9.08<\/u> Governing Law; Jurisdiction<\/u>. This Agreement shall
\nbe governed and construed in accordance with the laws of the State of New York
\napplicable to contracts made and entirely to be performed within such state,
\nwithout regard to any applicable conflicts of law principles that would require
\nthe application of the laws of any other jurisdiction; provided<\/em> that
\nthe DGCL, including the provisions thereof governing the fiduciary duties of
\ndirectors of a Delaware corporation, shall govern as applicable. The Parties
\nhereto agree that any suit, action or proceeding brought by either Party to
\nenforce any provision of, or based on any matter arising out of or in connection
\nwith, this Agreement or the transactions contemplated hereby, whether in tort or
\ncontract or at law or in equity, exclusively, in the United States District
\nCourt for the Southern District of New York. Each of the Parties hereto
\nirrevocably submits to the exclusive jurisdiction of such court in any suit,
\naction or proceeding seeking to enforce any provision of, or based on any matter
\narising out of, or in connection with, this Agreement or the transactions
\ncontemplated hereby and hereby irrevocably waives the benefit of jurisdiction
\nderived from present or future domicile or otherwise in such action or
\nproceeding. Each Party hereto irrevocably waives, to the fullest extent
\npermitted by Law, any objection that it may now or hereafter have to the laying
\nof the venue of any such suit, action or proceeding in such court or that any
\nsuch suit, action or proceeding brought in such court has been brought in an
\ninconvenient forum or that such Party is not subject to personal jurisdiction in
\nsuch court.<\/p>\n

Section 9.09<\/u> Waiver of Jury Trial<\/u>. Each Party hereto
\nacknowledges and agrees that any controversy that may arise under this Agreement
\nis likely to involve complicated and difficult issues, and therefore each Party
\nhereby irrevocably and unconditionally waives any right such Party may have to a
\ntrial by jury in respect of any litigation, directly or indirectly, arising out
\nof, or relating to, this Agreement, or the transactions contemplated by this
\nAgreement. Each Party certifies and acknowledges that (a) no representative,
\nagent or attorney of any other Party has represented, expressly or otherwise,
\nthat such other Party would not, in the event of litigation, seek to enforce the
\nforegoing waiver, (b) each Party understands and has considered the implications
\nof this waiver, (c) each Party makes this waiver voluntarily and (d) each Party
\nhas been induced to enter into this Agreement by, among other things, the mutual
\nwaivers and certifications in this Section 9.09.<\/p>\n

– 60 –<\/p>\n

\n

Section 9.10<\/u> Publicity<\/u>. Neither the Company nor Purchaser
\nshall, and neither the Company nor Purchaser shall permit any of its
\nSubsidiaries or their respective Representatives to, issue or cause the
\npublication of any press release or other public announcement with respect to,
\nor otherwise make any public statement, or, except as otherwise specifically
\nprovided in this Agreement, any disclosure of nonpublic information to a third
\nparty, concerning, the transactions contemplated by this Agreement without the
\nprior consent (which shall not be unreasonably withheld or delayed) of
\nPurchaser, in the case of a proposed announcement, statement or disclosure by
\nthe Company or its Subsidiaries or their respective Representatives, or the
\nCompany, in the case of a proposed announcement, statement or disclosure by
\nPurchaser or its Subsidiaries or their respective Representatives;
\nprovided<\/em>, however<\/em>, that either Party may, without the prior
\nconsent of the other Party (but after prior consultation with the other Party to
\nthe extent practicable under the circumstances) issue or cause the publication
\nof any press release or other public announcement to the extent required by Law
\nor by the rules and regulations of NASDAQ or the New York Stock Exchange.<\/p>\n

Section 9.11<\/u> Assignment; Third-Party Beneficiaries<\/u>. Neither
\nthis Agreement nor any of the rights, interests or obligations under this
\nAgreement shall be assigned by either of the Parties (whether by operation of
\nlaw or otherwise) without the prior written consent of the other Party (which
\nshall not be unreasonably withheld or delayed). Any attempted or purported
\nassignment in contravention hereof shall be null and void. Subject to the
\npreceding sentence, this Agreement shall be binding upon, inure to the benefit
\nof and be enforceable by each of the Parties and their respective successors and
\nassigns. Except for Section 6.04, which is intended to benefit each Indemnified
\nParty and his or her heirs and representatives, this Agreement (including the
\ndocuments and instruments referred to in this Agreement) is not intended to and
\ndoes not confer upon any person other than the Parties hereto any rights or
\nremedies under this Agreement including, without limitation, the right to rely
\nupon the representations and warranties set forth herein.<\/p>\n

Section 9.12<\/u> Specific Performance<\/u>. The Parties agree that
\nirreparable damage would occur in the event that any of the provisions of this
\nAgreement were not performed in accordance with their specific terms. It is
\naccordingly agreed that the Parties shall be entitled to seek specific
\nperformance of the terms hereof, this being in addition to any other remedies to
\nwhich they are entitled at law or equity, in tort or any other claims.<\/p>\n

Section 9.13<\/u> Definitions<\/u>. The following terms, as used herein,
\nhave the following meanings:<\/p>\n

“Acquisition Proposal<\/u>” means (i) any proposal or offer with respect to
\na merger, joint venture, partnership, consolidation, dissolution, liquidation,
\ntender offer, recapitalization, reorganization, share exchange, business
\ncombination or similar transaction involving the Company or any of its
\nSubsidiaries and (ii) any acquisition by any Person resulting in, or proposal or
\noffer, which if consummated would result in, any Person becoming the beneficial
\nowner of directly or indirectly, in one or a series of related transactions, 15%
\nor more of the total voting power or of any class of equity securities of the
\nCompany or those of any of its<\/p>\n

– 61 –<\/p>\n

\n

Subsidiaries, or 15% or more of the consolidated total assets (including,
\nwithout limitation, equity securities of its Subsidiaries) of the Company, in
\neach case other than the transactions contemplated by this Agreement.<\/p>\n

“Affiliate<\/u>” shall mean, with respect to a Person, those other Persons
\nthat, directly or indirectly, control, are controlled by or are under common
\ncontrol with such Person; for purposes of this definition, “control” (including,
\nwith correlative meanings, the terms “controlled by” or “under common control
\nwith”), as applied to any person, means the possession, directly or indirectly,
\nof (i) ownership, control or power to vote twenty-five percent (25%) or more of
\nthe outstanding shares of any class of voting securities of such person, (ii)
\ncontrol, in any manner, over the election of a majority of the directors,
\ntrustees or general partners (or individuals exercising similar functions) of
\nsuch person or (iii) the power to exercise a controlling influence over the
\nmanagement or policies of such person as determined by the Federal Reserve;
\nprovided<\/em>, however<\/em>, neither the Company nor any of its
\nAffiliates shall be deemed an Affiliate of Purchaser, or Purchaser153s ultimate
\nparent company, or any of their respective Subsidiaries for purposes of this
\nAgreement prior to the Effective Time and neither Purchaser nor any of its
\nAffiliates shall be deemed an Affiliate of the Company or its Subsidiaries for
\npurposes of this Agreement prior to the Effective Time.<\/p>\n

“Contract<\/u>” shall mean any agreement, contract, instrument, guarantee,
\nundertaking, lease, note, mortgage, indenture, license or other legally binding
\ncommitment or obligation, whether written or oral.<\/p>\n

“Encumbrance<\/u>” shall mean any mortgage, lien, pledge, charge, security
\ninterest, easement, covenant, or other restriction or title matter or
\nencumbrance of any kind in respect of such asset but specifically excludes (a)
\nspecified encumbrances described in Section 9.13 of the Company Disclosure
\nSchedule; (b) encumbrances for current Taxes or other governmental charges not
\nyet due and payable, or the validity or amount of which is being contested in
\ngood faith by appropriate proceedings and are reflected on or specifically
\nreserved against or otherwise disclosed in the Financial Statements; (c)
\nmechanics153, carriers153, workmen153s, repairmen153s or other like encumbrances arising
\nor incurred in the ordinary course of business consistent with past practice
\nrelating to obligations as to which there is no default on the part of the
\nCompany, or the validity or amount of which is being contested in good faith by
\nappropriate proceedings and are reflected on or specifically reserved against or
\notherwise disclosed in the Financial Statements; and (d) other encumbrances that
\ndo not, individually or in the aggregate, materially impair the continued use,
\noperation, value or marketability of the specific parcel of Owned Real Property
\nto which they relate or the conduct of the business of the Company and its
\nSubsidiaries as presently conducted.<\/p>\n

“Excluded Shares<\/u>” means Shares owned by Purchaser, the Company or any
\ndirect or indirect wholly owned subsidiary of Purchaser or the Company, in each
\ncase not held (i) in trust accounts (including grantor or rabbi trust accounts),
\nmanaged accounts and the like, or otherwise held in a fiduciary or agency
\ncapacity, that are beneficially owned by third parties or (ii) in respect of a
\ndebt previously contracted.<\/p>\n

“GAAP<\/u>” shall mean U.S. generally accepted accounting principles.<\/p>\n

– 62 –<\/p>\n

\n

“Governmental Entity<\/u>” shall mean any federal, state, local, foreign or
\nsupranational court, tribunal, arbitral or administrative agency or commission
\nor other governmental authority or instrumentality.<\/p>\n

“Knowledge<\/u>” shall mean the actual knowledge of any of the officers of
\nthe Company or one of its Subsidiaries listed on Section 9.13 of the Company
\nDisclosure Schedule, after reasonable inquiry.<\/p>\n

“Laws<\/u>” shall mean any federal, state, local or foreign law, common
\nlaw, statute, code, ordinance, rule or regulation issued, promulgated, entered
\nor authorized by any Governmental Entity.<\/p>\n

“Material Adverse Effect<\/u>” shall mean any fact, event, change,
\ncondition, occurrence, development, circumstance, effect or state of facts that:\n<\/p>\n

(i) individually or in the aggregate, has been, or would reasonably be
\nexpected to be, materially adverse to the business, assets, results of
\noperations or financial condition of the Company and its Subsidiaries, in each
\ncase taken as a whole; provided<\/em>, however<\/em>, that no fact, event,
\nchange, condition, occurrence, development, circumstance, effect or state of
\nfacts to the extent resulting from any of the following shall be considered in
\ndetermining whether a Material Adverse Effect has occurred or is in existence:\n<\/p>\n

(1) the entry into or announcement of the execution of this Agreement or
\ncompliance by the Company with the terms of this Agreement,<\/p>\n

(2) changes, after the date hereof, in Laws, rules and regulations of general
\napplicability, or of general applicability to banks or their holding companies,
\nor interpretations thereof by Governmental Entities, including any change in
\nGAAP or regulatory accounting requirements,<\/p>\n

(3) changes in the economy or financial markets, generally, in the United
\nStates,<\/p>\n

(4) changes in economic, business or financial conditions generally affecting
\nthe banking industry,<\/p>\n

(5) a decline in the price of the Common Stock on NASDAQ, provided<\/em>
\nthat the exception in this clause shall not prevent or otherwise affect a
\ndetermination that any change, effect, circumstance or development underlying
\nsuch decline has resulted in, or contributed to, a Material Adverse Effect, or\n<\/p>\n

(6) any outbreak or escalation of hostilities, declared or undeclared acts of
\nwar or terrorism;<\/p>\n

provided<\/em> that the foregoing clauses (2), (3) and (4) and (6) shall
\nnot apply to the extent such fact, event, change, condition, occurrence,
\ndevelopment, circumstance, effect, action, omission or state of facts of the
\ntype referred to therein, has a disproportionate impact on the business, assets,
\nresults of operations or financial condition of the Company and its Subsidiaries
\ncompared to other comparable companies within the banking industry, or<\/p>\n

– 63 –<\/p>\n

\n

(ii) prevents, materially delays or materially impairs the ability of the
\nCompany to perform its obligations under this Agreement or to consummate the
\nMerger.<\/p>\n

“Order<\/u>” means any order, writ, injunction, decree, judgment, ruling,
\narbitration award or stipulation issued, promulgated or entered into by or with
\nany Governmental Entity.<\/p>\n

“Person<\/u>” shall mean any individual, corporation (including
\nnot-for-profit), general or limited partnership, limited liability company,
\njoint venture, estate, trust, association, organization, Governmental Entity or
\nother entity of any kind or nature.<\/p>\n

“Purchaser Material Adverse Effect<\/u>” shall mean any fact, event,
\nchange, condition, occurrence, development, circumstance, effect or state of
\nfacts that prevents, materially delays or materially impairs the ability of
\nPurchaser or Merger Sub to perform their respective obligations under this
\nAgreement or to consummate the Merger.<\/p>\n

“SRO<\/u>” means any industry self-regulatory organization.<\/p>\n

“Subsidiary<\/u>” shall, when used with respect to either party, have the
\nmeaning ascribed to it in Section 2(d) of the BHCA.<\/p>\n

“Superior Proposal<\/u>” means an unsolicited bona fide Acquisition
\nProposal that would result in any Person becoming the beneficial owner, directly
\nor indirectly, more than 50% of the assets (on a consolidated basis) or more
\nthan 50% of the total voting power of the equity securities of the Company that
\nthe Company Board has determined in its good faith judgment is reasonably likely
\nto be consummated in accordance with its terms, taking into account all legal,
\nfinancial and regulatory aspects of the proposal and the Person making the
\nproposal, and if consummated, would result in a transaction more favorable to
\nthe Company153s stockholders from a financial point of view than the transaction
\ncontemplated by this Agreement (after taking into account any revisions to the
\nterms of the transaction contemplated by Section 6.06(d) of this Agreement
\npursuant to Section 6.06(d) and the time likely to be required to consummate
\nsuch Acquisition Proposal).<\/p>\n

“Tax Return<\/u>” shall mean any return, report, information return or
\nother document (including any related or supporting information) required to be
\nfiled with any taxing authority with respect to Taxes, including, without
\nlimitation, any claims for refunds of Taxes and any amendments or supplements to
\nany of the foregoing.<\/p>\n

“Taxes<\/u>” shall mean all taxes, charges, levies, penalties or other
\nassessments imposed by any United States federal, state, local or foreign taxing
\nauthority, including any income, excise, property, sales, transfer, franchise,
\npayroll, withholding, social security, abandoned or unclaimed property or other
\ntaxes, together with any interest, penalties or additions to tax attributable
\nthereto.<\/p>\n

– 64 –<\/p>\n

\n

Section 9.14<\/u> Other Definitional Provisions<\/u>. Unless the express
\ncontext otherwise requires:<\/p>\n

(a) the words “hereof,” “herein,” and “hereunder” and words of similar
\nimport, when used in this Agreement, shall refer to this Agreement as a whole
\nand not to any particular provision of this Agreement;<\/p>\n

(b) the terms defined in the singular have a comparable meaning when used in
\nthe plural, and vice versa;<\/p>\n

(c) the terms “Dollars” and “$” mean United States Dollars;<\/p>\n

(d) references herein to a specific Section, Subsection or Exhibit shall
\nrefer, respectively, to Sections, Subsections or Exhibits of this Agreement; and\n<\/p>\n

(e) wherever the word “include,” “includes,” or “including” is used in this
\nAgreement, it shall be deemed to be followed by the words “without limitation.”\n<\/p>\n

(f) references herein to any statute, law, code, regulation or treaty shall
\nbe deemed to include any amendments thereto from time to time or any successor
\nstatute, law, code, regulation, treaty or protocol thereof and any the rules and
\nregulations promulgated thereunder.<\/p>\n

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK<\/em>]<\/p>\n

– 65 –<\/p>\n

\n

IN WITNESS WHEREOF<\/strong>, the Parties have caused this Agreement
\nto be executed by their respective officers thereunto duly authorized as of the
\ndate first above written.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

UNIONBANCAL CORPORATION<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ Masashi Oka<\/p>\n<\/td>\n<\/tr>\n

\n

Name:<\/p>\n<\/td>\n

<\/td>\n\n

Masashi Oka<\/p>\n<\/td>\n<\/tr>\n

\n

Title:<\/p>\n<\/td>\n

<\/td>\n\n

President and Chief Executive Officer<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

PEBBLE MERGER SUB INC.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ John Woods<\/p>\n<\/td>\n<\/tr>\n

\n

Name:<\/p>\n<\/td>\n

<\/td>\n\n

John Woods<\/p>\n<\/td>\n<\/tr>\n

\n

Title:<\/p>\n<\/td>\n

<\/td>\n\n

Chairman and President<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

PACIFIC CAPITAL BANCORP<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ Carl B. Webb<\/p>\n<\/td>\n<\/tr>\n

\n

Name:<\/p>\n<\/td>\n

<\/td>\n\n

Carl B. Webb<\/p>\n<\/td>\n<\/tr>\n

\n

Title:<\/p>\n<\/td>\n

<\/td>\n\n

CEO<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

EXHIBIT A <\/strong><\/p>\n

Form of Certificate of Incorporation <\/strong><\/p>\n

CERTIFICATE OF INCORPORATION<\/p>\n

OF<\/p>\n

PACIFIC CAPITAL BANCORP<\/p>\n

1. Name<\/u>. The name of the corporation is Pacific Capital Bancorp (the
\n“Corporation<\/u>“).<\/p>\n

2. Address; Registered Office and Agent<\/u>. The address of the
\ncorporation153s registered office in the State of Delaware is Corporation Service
\nCompany, 2711 Centerville Road, Wilmington, County of New Castle, DE 19808. The
\nname of its registered agent at such address is Corporation Service Company.\n<\/p>\n

3. Purposes<\/u>. The purpose of the Corporation is to engage in any lawful
\nact or activity for which corporations may be organized under the Delaware
\nGeneral Corporation Law (the “DGCL<\/u>“).<\/p>\n

4. Number of Shares<\/u>. The total number of shares of stock that the
\nCorporation shall have authority to issue is 1,000, all of which shall be shares
\nof Common Stock with the par value of $0.001 per share.<\/p>\n

5. Name and Mailing Address of Incorporator<\/u>. The name and mailing
\naddress of the sole incorporator is Christine M. Sontag, 20 East Carrillo
\nStreet, Santa Barbara, California 93101.<\/p>\n

6. Election of Directors<\/u>. Unless and except to the extent that the
\nBy-Laws of the Corporation (the “By-Laws<\/u>“) shall so require, the election
\nof directors of the Corporation need not be by written ballot.<\/p>\n

7. Limitation of Liability<\/u>.<\/p>\n

(a) To the fullest extent permitted under the DGCL, as amended from time to
\ntime, no director of the Corporation shall be personally liable to the
\nCorporation or its stockholders for monetary damages for breach of fiduciary
\nduty as a director.<\/p>\n

(b) Any amendment or repeal of Section 7(a) shall not adversely affect any
\nright or protection of a director of the Corporation hereunder in respect of any
\nact or omission occurring prior to the time of such amendment or repeal.<\/p>\n

8. Adoption, Amendment or Repeal of By-Laws<\/u>. The board of directors of
\nthe Corporation is expressly authorized to adopt, amend or repeal the By-Laws.\n<\/p>\n

9. Certificate Amendments<\/u>. The Corporation reserves the right at any
\ntime, and from time to time, to amend or repeal any provision contained in this
\nCertificate of Incorporation, and add other provisions authorized by the laws of
\nthe State of Delaware at the time in force, in the manner now or hereafter
\nprescribed by applicable law; and all rights, preferences and privileges of
\nwhatsoever nature conferred upon stockholders, directors or any other persons
\nwhomsoever by and pursuant to this Certificate of Incorporation (as amended) are
\ngranted subject to the rights reserved in this Article.<\/p>\n

-A-1-<\/p>\n

\n

EXHIBIT B <\/strong><\/p>\n

Form of Written Consent <\/strong><\/p>\n

WRITTEN CONSENT<\/p>\n

OF STOCKHOLDERS OF<\/p>\n

PACIFIC CAPITAL BANCORP IN LIEU OF MEETING<\/p>\n

Pursuant to, and in accordance with, the provisions of Section 228 and
\nSection 251 of the General Corporation Law of the State of Delaware, and Section
\n10 of Article II of the Bylaws of Pacific Capital Bancorp, a Delaware
\ncorporation (the “Company<\/u>“), the undersigned, as the record holder of
\n25,000,000 shares of the common stock, par value $0.001 per share, of the
\nCompany, does hereby irrevocably consent to, approve and adopt the following
\nresolution:<\/p>\n

WHEREAS, the Board of Directors of the Company has approved and declared
\nadvisable the Merger Agreement (as defined below) and has directed that the
\nMerger Agreement be submitted to the stockholders of the Company for their
\nadoption;<\/p>\n

NOW THEREFORE, BE IT:<\/p>\n

RESOLVED, that the Agreement and Plan of Merger, dated as of March 9, 2012,
\namong UnionBanCal Corporation, a Delaware corporation (“Purchaser<\/u>“),
\nPebble Merger Sub Inc., a Delaware corporation and a direct wholly owned
\nsubsidiary of Purchaser, and the Company, in the form attached to this consent
\n(the “Merger Agreement<\/u>“), be, and it hereby is, consented to, approved
\nand adopted in all respects.<\/p>\n

RESOLVED, further, that the Merger (as defined in the Merger Agreement) and
\nthe other transactions contemplated by the Merger Agreement be, and hereby are,
\nconsented to, approved and adopted in all respects.<\/p>\n

RESOLVED, further, that all actions heretofore taken by the Board of
\nDirectors and officers of the Company in connection with the Merger Agreement,
\nthe Merger and the other transactions contemplated by the Merger Agreement be,
\nand hereby are, consented to, approved and adopted in all respects.<\/p>\n

-B-1-<\/p>\n

\n

IN WITNESS WHEREOF, the undersigned has executed this instrument.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

SB ACQUISITION COMPANY LLC<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

Ford Financial Fund, L.P., its sole member<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

Ford Management, L.P., its general partner<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

Ford Ultimate Management, LLC, its general partner<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

2009 TCRT, its sole member<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Dated:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

Name:<\/p>\n<\/td>\n

<\/td>\n\n

Gerald J. Ford<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

Title:<\/p>\n<\/td>\n

<\/td>\n\n

Trustee<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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